RBI MPC Announcement: The Reserve Bank of India (RBI) projected CPI inflation for FY25 at 4.5%.
The forecasted CPI inflation year 2024–25 is 4.5%, with Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.The RBI governor declared that the risks are evenly distributed.
The RBI governor, Shaktikanta Das, said during the RBI MPC announcement that two years ago, around this time, when CPI inflation had peaked at 7.8% in April 2022, the elephant in the room was inflation. The elephant has now gone out for a walk and appears to be returning to the forest.
"We would like the elephant to return to the forest and remain there on a durable basis. In other words, it is essential for the best interest of the economy that CPI inflation continues to moderate and aligns with the target on a durable basis, said Das during RBI MPC announcement today.
According to Shaktikanta Das, CPI inflation is predicted to drop to 3.8% by Q2FY25 before rising once more to around 4.5% by the end of the fiscal year.
Das pointed out that inflation has come down significantly but remains above the 4% target. Food inflation continues to exhibit considerable volatility, which is impeding the ongoing disinflation process. High and persistent food inflation could unhinge the anchoring of inflation expectations, which is why our ongoing effort is to ensure fuller transmission of policy actions and the anchoring of household inflation expectations.
“The success of the disinflation process so far should not distract us from the vulnerability of the inflation trajectory to the frequent incidence of supply-side shocks. Our effort is to ensure price stability on an enduring basis, paving the way for sustained periods of high growth," said the RBI governor today.