The Reserve Bank of India (RBI) has projected the Consumer Price Index (CPI) inflation at 5.3 percent for the financial year 2022, lower than the 5.7 percent estimated earlier. Governor Shaktikanta Das announced the estimation while discussing the outcomes of the fourth policy meet for the financial year 2021-22.
Das increased the inflation projection for the first quarter of the financial year 2023 to 5.2 percent from 5.1 percent earlier. The central bank further projected the inflation at 5.1 percent in the second quarter of FY22, 4.5 percent in Q3, and retained 5.8 percent in Q4.
He said headline CPI inflation was at 5.3 percent in August, moderated for the second consecutive month due to food inflation. However, it continues to be influenced by few items like edible oils and petroleum.
Regardless, he said, the CPI inflation momentum is moderating and it could soften inflation in the near term.
The Consumer Price Index or retail index inflation measures the average change in prices over time that consumers pay for goods and services. It is the most widely used measure of inflation and reflects the effectiveness of the government's economic policy.
Governor Shaktikanta Das said the CPI softened during July-August. Monsoon has improved in September and Kharif production has been at a record high, he said. "We expect food price inflation to remain under control," Das said, adding that there are evolving factors providing comfort in food prices going ahead.
The RBI's Monetary Policy Committee voted 5:1 to maintain an accommodative stance and keep the repo rates unchanged at 4 percent as recovery remained uneven. The central bank has kept the MSF rate and bank rate unchanged at 4.25 percent. And reverse repo rate remains unchanged at 3.35 percent.
India is in a much better place today, Guv said, than it was during the last MPC meeting. Our growth impulses are strengthening and the inflation trajectory is more favourable than expected. "RBI has taken more than 100 measures to proactively respond to the unprecedented crisis," he added.
(Edited by : Yashi Gupta)
First Published: IST