RBI MPC Meeting Live: RBI governor Shaktikanta Das on Friday announced that the Monetary Policy Committee has decided to keep the repo rate unchanged at 6.5% with a 4:2 majority. RBI governor said that while the MPC has taken note of the GDP growth data for Q2 of FY2025, and will revise downwards the growth outlook for the financial year accordingly, inflation remains the key focus area. The real GDP growth forecast for FY25 was revised downward substantially from 7.2% earlier to 6.6%.
“High inflation reduces the disposable income in the hands of consumers and dense private consumption, which negatively impacts the real GDP growth, the increasing incidence of adverse weather events, heightened geopolitical uncertainties and financial market volatility pose upside risks to inflation. The MPC believes that only with durable price stability can strong foundations be secured for high growth. The MPC remains committed to restoring the inflation growth balance,” he said.
The six-member Monetary Policy Committee (MPC), led by Reserve Bank Governor Shaktikanta Das, commenced its bi-monthly policy deliberations on Wednesday.
This marks Das’s final MPC meeting as chairperson, with his tenure concluding on December 10.
RBI Monetary Policy Meeting Live Updates: CPI Inflation outlook
Headline CPI inflation surged above the upper tolerance level to 6.2% in October from 5.5 % in September and sub-4.0% prints in July-August, propelled by a sharp pick-up in food inflation and an uptick in core (CPI excluding food and fuel) inflation.
Going forward, food inflation is likely to soften in Q4 with seasonal easing of vegetables prices and kharif harvest arrivals; and good soil moisture conditions along with comfortable reservoir levels auguring well for rabi production.
Adverse weather events and rise in international agricultural commodity prices, however, pose upside risks to food inflation. Even though energy prices have softened in the recent past, its sustenance needs to be monitored. Businesses expect pressures from input costs to remain elevated and growth in selling prices to accelerate from Q4.
Taking all these factors into consideration, CPI inflation for 2024-25 is projected at 4.8% with Q3 at 5.7%; and Q4 at 4.5%.
CPI inflation for Q1:2025-26 is projected at 4.6%; and Q2 at 4.0%.The risks are evenly balanced.