RBI MPC 2024: Inflation pegged at 4.5% for FY2024-25, says Governor Shaktikanta Das

Reserve Bank of India (RBI) governor Shaktikanta Das on Thursday said that CPI inflation for FY25 is projected at 4.5 per cent. CPI inflation is pegged at 4.9 per cent for Q1FY25, 4.4 per cent for Q2FY25, 4.7 per cent for Q3FY25, and 4.3 per cent for Q4FY25. 

Shaktikanta Das also said that the CPI inflation for 2025-26 is projected at 4.4 per cent, while adding that risks are evenly balanced. Das said that in Q3, substantial advantage of base effect may pull down the overall inflation. 

The RBI governor mentioned that after remaining steady in April at 4.8 per cent, headline inflation went up to 5.1 per cent in June this year due to higher-than-expected food inflation. 

The RBI boss further said that inflation in India is broadly on a declining trajectory. He also said that the softening in core inflation continues to be broad based, given the decline in core services inflation in May and June. Tariff hikes by major telcos will also put pressure on core inflation. 

He also reiterated the central bank's focus on keeping inflation levels below the 4 per cent threshold. Das added that while overall inflation trajectory is moderating, central bank is likely to observe continued moderation and be watchful.

He further said that food component of inflation, which has a 46 per cent weight on headline inflation, remains stubborn. Food inflation went up from 8.69 per cent in May to 9.55 per cent in June, with vegetable prices going up 27.33 per cent. High food prices slowed the process of disinflation in Q1FY25, Das said. 

Meanwhile, the central bank kept the repo rate steady 6.5 per cent and maintained withdrawal of the accommodation stance. "We are seeing good convergence between market expectations and RBI policies, they are well aligned," Das said. This is the ninth straight MPC in which the central bank decided to keep the key policy rates unchanged.