RBI raises inflation outlook to 4.8% for FY25

Reserve Bank of India (RBI) Governor Shaktikanta Das delivers the Monetary Policy statement, Friday, Dec. 6, 2024.
| Photo Credit: PTI

The Reserve Bank of India raised India’s Consumer Price Inflation outlook for 2024-25 to 4.8% from 4.5%, with Q3 at 5.7% and Q4 at 4.5%. Going into FY 2025-26, the RBI projected Q1 inflation at 4.6% and Q2 at 4%.

Inflation increased sharply in September and October, led by an unanticipated increase in food prices. Core inflation, though at subdued levels, also registered a pick-up in October, the Reserve Bank of India Governor Shaktikanta Das said on Friday (December 6, 2024).

In the near term, despite some softening, lingering food price pressures are likely to keep headline inflation elevated in the third quarter — October to December, Mr. Das said. The near term inflation and growth outcomes in India have turned somewhat adverse since the last Monetary Policy Review, Mr. Das noted.

Manufacturing and services firms surveyed by the Reserve Bank point to hardening input costs and hikes in selling prices in Q4 of 2024-25 — January to March.

The RBI’s Monetary Policy Committee (MPC) on Friday (December 6, 2024) decided to keep the policy repo rate unchanged at 6.50% for the 11th consecutive time.