Last updated on June 21st, 2023 at 12:51 pm
Highlights : MPC 2023
- CPI inflation forecast for 2023-24 lowered to 5.2% from 5.3% previously estimated.
- April-June 2023 CPI inflation forecast increased to 5.1% from 5.0%.
- July-September 2023 CPI inflation forecast remains at 5.4%.
- October-December 2023 CPI inflation forecast retained at 5.4%.
- GDP growth forecast for 2023-24 raised to 6.5% from 6.4%.
- October-December 2023 GDP growth forecast increased to 6.1% from 6.0%.
The Governor of RBI, Shaktikanta Das, announced the revised CPI inflation forecast for 2023-24, which has been lowered to 5.2% from the previous estimate of 5.3%. The April-June 2023 forecast has been increased to 5.1% from 5.0%, while the July-September 2023 forecast remains at 5.4%. The October-December 2023 forecast is also retained at 5.4%, and the January-March 2024 forecast has been lowered to 5.2% from 5.6%.
In terms of GDP growth forecast, the April-June 2023 forecast remains at 7.8%, and the July-September 2023 forecast is retained at 6.2%. The October-December 2023 forecast has been raised to 6.1% from the previous estimate of 6.0%, and the January-March 2024 forecast has been changed to 5.9% from 5.8%. Moreover, the GDP growth forecast for 2023-24 has been raised to 6.5% from 6.4% previously estimated.
The Reserve Bank of India’s Monetary Policy Committee (MPC) has decided to maintain the repo rate at 6.5% during its bi-monthly meeting, as per the latest updates. This move is in line with market expectations, as the RBI aims to balance growth and inflation concerns.
However, the MPC stated that it will not hesitate to take further action as required in future meetings. The decision to pause the repo rate is only for this meeting, and it is necessary to evaluate the cumulative impact of previous rate hikes.
The unanimous decision by the MPC to maintain the repo rate unchanged at 6.5% comes at a time when the global economy is facing a renewed phase of turbulence. Inflation has been a major concern, with core inflation, excluding volatile food and energy components, expected to remain high between 6.05% and 6.12% in February, as estimated by three economists.
Unseasonal rains could keep food prices elevated, and a surprise move by OPEC and its allies to cut output has increased oil prices, which may add to imported inflation.
