Even though inflation fell to 4.87 percent in October, it is still expected to be above the medium-term target of 4 percent for some time. In an effort to achieve a balance between sustainable growth and economic stability, the RBI has taken a cautious stance.
RBI Governor Shaktikanta Das stated that rising global sugar prices are a reason for concern and that unpredictable food prices will have a significant impact on the near-term inflation outlook.
Source: Hindustan Times
In an effort to control food inflation, the government has taken a number of actions this year, including restricting the export of rice, sugar, and onions and outlawing the export of wheat.
According to a study by Deutsche Bank, the extended halt on the interest rate front is anticipated to last until June 2024, given the RBI’s declaration that “over-tightening” can pose growth risks to the economy. This implies that no rate increase or decrease will occur before the Lok Sabha elections. The repo rate was last raised by the central bank in February.
Source: NDTV
The RBI revised its prediction for economic growth in the current financial year to 7% from 6.5% due to the stronger-than-expected 7.6% growth in the July-September quarter. This action demonstrates India’s remarkable performance as the largest economy with the fastest rate of growth in the world.
September showed an 8.1% increase in the index of eight basic industries, which includes coal, crude oil, natural gas, fertiliser products, steel, cement, and power. With the industrial sector returning to its previous level, the Indian economy should continue to be robust despite external challenges. It can also more successfully endure inflationary pressures with robust growth.
What do you think about this? Comment below.