RBI MPC Oct 2024: Retail Inflation Estimated At 4.5 Per Cent For FY25, Food Prices To Ease In Q4

The inflation figure for Q2 in the current fiscal year is estimated at 4.5 per cent, while the projections for the third and fourth quarters stand at 4.8 per cent and 4.2 per cent respectively

RBI MPC October 2024: The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) revealed its decision on Wednesday on key rates and decided to maintain the status quo. Further, the committee also gave its projections for inflation levels in the economy.

Governor Shaktikanta Das revealed that the CPI retail inflation for the 2024-25 fiscal year (FY25) is projected at 4.5 per cent. The inflation figure for the second quarter in the current fiscal year is estimated at 4.5 per cent, while the projections for the third and fourth quarters stand at 4.8 per cent and 4.2 per cent respectively.

The inflation projections for the April-June quarter in the upcoming fiscal year 2025-26 (FY26) stand at 4.3 per cent, the committee noted. Explaining the global scenario, the MPC said that the world economy has maintained a resilient outlook and is expected to maintain a stable pace over the remaining part of the year.

Food Inflation

The Governor noted that food inflation is anticipated to reduce later in the year due to a good monsoon and a sufficient buffer stock of essential commodities. This will also help stabilise food prices in the economy and also ease down the inflationary pressures.

The headline inflation slipped to 3.6 per cent in July and 3.7 per cent in August in comparison to 5.1 per cent clocked in June. Going ahead, the inflation print in September could see a major pick-up as food prices log an upturn. The food inflation is expected to ease down by the fourth quarter of the current fiscal year.

"On the demand side, healthy kharif sowing, coupled with sustained momentum in consumer spending in the festival season, augur well for private consumption. Consumer and business confidence have improved. The investment outlook is supported by resilient non-food bank credit growth, elevated capacity utilisation, healthy balance sheets of banks and corporates, and the government’s continued thrust on infrastructure spending. External demand is expected to get support from improving global trade volumes," the committee said.