RBI MPC Dec 2024: Retail Inflation Estimate For FY25 Raised To 4.8 Per Cent, Food Prices To Remain Higher

RBI MPC Dec 2024: Governor Shaktikanta Das said that the retail inflation rate for FY25 is now estimated to be at 4.8 per cent, up from 4.5 per cent, projected in the previous meeting

The governor said that inflation rate is expected to touch 5.7 per cent in the October-December quarter in the current fiscal and tamper down to 4.5 per cent in the last quarter of the year.

Source : ABPLIVE AI

The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) decided to maintain the status quo on key rates and keep the repo rates unchanged at 6.5 per cent. 

Sharing the projections about inflation levels in the economy, Governor Shaktikanta Das said that the retail inflation rate for the 2024-25 fiscal year (FY25) is now estimated to be at 4.8 per cent. Comparatively, the earlier inflation estimates for the current fiscal year stood at 4.5 per cent.

The governor said that inflation rate is expected to touch 5.7 per cent in the October-December quarter in the current fiscal and tamper down to 4.5 per cent in the last quarter of the year.

The inflation forecast for the next fiscal year 2025-26 (FY26) stood at 4.6 per cent in the first quarter and 4 per cent in the second quarter. In the last MPC meeting, the committee projected inflation to remain at 4.3 per cent in the April-June quarter (Q1) in FY26.

The governor noted that the inflation growth outlook in the near-term has turned ‘adverse’ after the last meeting of the MPC in October. Meanwhile, consistently elevated food prices are likely to add more pressure on inflation and keep it elevated in the October-December period in the current fiscal year. However, some relief is expected in the January-March period backed by Rabi production, he stated.

The governor informed that the growth projections for the current fiscal year have been downgraded. The RBI slashed the GDP growth rate estimate for the 2024-25 fiscal year (FY25) to 6.6 per cent, from the earlier projection of 7.2 per cent. 

Meanwhile, pointing out the consistent elevation in food prices, the central bank hiked the retail inflation forecast to 4.8 per cent for the current financial year, in comparison to 4.5 per cent projected in the previous MPC meet.