Indian Economy Poised For Potentially Stable High Growth Phase, Says RBI’s Monetary Policy Panel Member

Bhide said while food inflation is at a high level, averaging about 8 per cent during Jan-May 2024, the overall CPI-based inflation has moderated to below 5 per cent during March-May 2024.”The prevailing policy rate combined with the gradual decline in inflation rate does mean higher real interest rates, but continued focus on keeping the inflation aligned with the target in a sustained way is important at this point to support growth as well,” he said.In its latest bi-monthly review earlier this month, the six-member monetary policy committee (MPC) of Reserve Bank of India left the key interest rate (repo rate) unchanged for the eighth time in a row at 6.5 per cent.The RBI has projected Consumer Price Index (CPI)-based retail inflation at 4.5 per cent for FY25 with 4.9 per cent in Q1 (April-June), 3.8 per cent in Q2, 4.6 per cent in Q3, and 4.5 per cent in Q4.Retail inflation was 4.75 per cent in May.The RBI, which has been mandated to ensure inflation remains at 4 per cent (with margin of 2 per cent on either side), mainly factors in CPI while arriving at its monetary policy.

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