RBI projects FY24 inflation at 5.2%

The Reserve Bank on Thursday projected marginal easing in retail inflation to 5.2 per cent in the current fiscal, but cautioned that the fight against inflation is far from over.

Although the Reserve Bank pared its inflation estimate from its February projection of 5.3 per cent, RBI Governor Shaktikanta Das said the inflation outlook remains dynamic amid the recent jump in crude oil prices on account of OPEC decision to cut output.

Taking into account a crude oil price of USD 80 per barrel and a normal monsoon, the retail inflation in the current fiscal is projected to be 5.2 per cent with risks evenly balanced, Das said.

For the June quarter, the retail inflation is expected to average 5.1 per cent, and rise to 5.4 per cent each in the September and December quarter.

It is expected to decline to 5.2 per cent in the March 2024 quarter.

Das said the Central bank’s war against inflation will continue until the inflation is brought down to target level.

“The fight against inflation is far from over….,” the Governor said in the monetary policy statement.

The RBI has the mandate of keeping inflation at 4 per cent, with a band of (+/-) 2 per cent on either side.

Retail inflation has remained above the RBI’s upper tolerance level of 6 per cent for two months and in February it was 6.44 per cent.