The governor of the Reserve Bank of India said on Wednesday that while inflation has eased, the central bank cannot be complacent about easing price pressures at this time due to potential weather-related uncertainties.
“The war on inflation is not over; we must remain vigilant,” said Shaktikanta Das at an event in New Delhi.
“Can’t be complacent. We’ll have to see how the El Nino factor plays out.”
India’s annual retail inflation eased to 4.7% in April from 5.66% in the previous month, according to the information.
Das said the retail inflation data for this month, scheduled for release on June 12, “may be lower.”
To ease inflationary pressures, the rate-setting Monetary Policy Committee increased the policy repurchase rate by 250 basis points from May last year. At its meeting last month, the panel kept the repurchase rate the same and is expected to stop again in June.
Das added that El Nino could affect India’s economic expansion as well as upside risks to inflation. He said there could also be downside risks to growth due to geopolitical uncertainties and a decline in merchandise trade as a result of a contraction in global trade.
Regardless of these variables, India’s gross domestic product growth could be over 7% for 2022-2023, and such a result, whenever realized, should not surprise anyone, he said. the governor.
He said that India’s GDP is expected to grow close to 6.5 percent in 2023 and 2024. He also said that the private sector is spending more on capital, and the government is spending more on infrastructure.
The RBI will try to be prudent and follow up on the opportunity to guarantee financial stability, remain proactive in foreign exchange management, and will continue to focus on the stability of the rupee, Das said.
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