RBI maintains inflation forecast at 4.5 per cent for 2024-25

Mumbai. The Reserve Bank of India (RBI) has retained the inflation forecast for the current financial year (2024-25) at 4.5 percent, given the forecast of normal monsoon. This is lower than the previous estimate of 5.4 percent for the financial year 2023-24. However, along with this, the central bank said that there is a need to keep a close watch on the food price scenario. Presenting the second bi-monthly monetary review of the current financial year, RBI Governor Shaktikanta Das said that assuming normal monsoon conditions this year, the Consumer Price Index (CPI) based inflation is estimated to be 4.5 percent for the current financial year.

Inflation is expected to be 4.9 percent in the first quarter, 3.8 percent in the second quarter, 4.6 percent in the third quarter and 4.5 percent in the fourth quarter. Das said, “Risks to inflation are evenly balanced.” The central government has given the Reserve Bank of India the target of keeping the consumer price index based inflation at four percent (two percent up or down).

Das said that the Consumer Price Index based inflation has softened in March-April, but its benefits have not been realized due to the continuous pressure on food inflation. Inflation of pulses and vegetables remains in double digits. The governor said, “Due to extreme heat and low level of reservoirs, there may be some pressure on the prices of summer season vegetables and fruits. There is a need to keep a careful watch on the arrival of Rabi pulses and vegetables.

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