RBI projects inflation at 6.7% for FY23; GDP growth at 7.2% 

Reserve Bank of India (RBI) has projected inflation at 6.7 per cent for FY2022-23. Consumer price-based inflation (CPI) for Q1 2023-24, on the other hand, is projected at 5 per cent, RBI Governor Shaktikanta Das said. He further added inflation is projected at 7.1 per cent (Q2), 6.4 per cent (Q3) and 5.8 per cent (Q4) in FY23.  

“Inflation projection for FY23 has been retained at 6.7 per cent on assumption of normal monsoon and crude oil at $105 per barrel,” Das said. Food inflation has reported moderation due to softening of edible oil prices and deepening deflation in pulses and eggs, he added.   

The monetary policy committee (MPC) statement stated that fuel inflation was in double digits in June predominantly due to a hike in LPG and kerosene prices.  

Besides, the RBI boss also laid down the GDP growth projections for FY2022-23 at 7.2 per cent. He said projections for Q1, Q2, Q3 and Q4 are 16.2 per cent, 6.2 per cent, 4.1 per cent and 4 per cent, respectively. Das also mentioned that real GDP growth for Q1 2023-24 is projected at 6.7 per cent.   

The central bank also withdrew its accommodative stance to ensure that inflation remains well within the target while supporting growth. “India is expected to be amongst the fastest growing economies during FY2022-23, according to the projections of the IMF with signs of inflation moderating over the course of current year,” Das said.   

Exports of goods and services coupled with remittances may keep current account deficit (or CAD) within sustainable limits, he further noted. Commenting on the global scenario, Das said that emerging markets are witnessing currency depreciation and reserve losses, and elevated food and energy prices are leading to vulnerability of livelihood in these countries.  

Das further said that financial markets have remained uneasy despite intermediate corrections and due to this the International Monetary Fund (IMF) has revised global growth projection downwards.  

Also read: RBI MPC: Repo rate increased by 50 bps to 5.40%; accommodative stance withdrawn

Also read: BREAKING: RBI MPC retains GDP projection at 7.2% for 2022-23