RBI MPC Highlight: GDP Growth Figures Retained & Inflation Forecasts For FY23

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RBI MPC Highlight: GDP Growth Figures Retained & Inflation Forecasts For FY23
Credit: © Reuters.

By Malvika Gurung

Investing.com -- The Monetary Policy Committee (MPC) of RBI has retained the real GDP growth projection for the ongoing financial year 2022-23 at 7.2% and the quarterly growth forecast figures in its policy outcome on Friday.

The committee has also maintained its retail inflation projection for the current financial year at 6.7%, which was revised from 5.7% in the preceding monetary policy review in June.

RBI Governor Shaktikanta Das, while delivering the outcome of the bi-monthly policy meet, said, "Headline inflation has recently flattened and the supply outlook is improving, helped by some easing of global supply constraints.”

For two consecutive quarters, CPI inflation has remained above the RBI’s tolerance range of 2-6%, and as per its latest forecast, MPC expects inflation to remain above 6% through the first three quarters of FY23, entailing the risk of destabilising inflation expectations and triggering second-round effects.

The central bank RBI has updated the CPI inflation projections at:

  • 7.1% from 7.4% in Q2 FY23,
  • 6.4% from 6.2% in Q3 FY23, 
  • 5.8% in Q4 FY23, and
  • 5% in Q1 FY24

The aforementioned forecasts are in line with assumptions that India’s crude oil basket price will average $105/barrel.

Further, the central bank has retained the GDP growth forecast for FY23 at 7.2% and quarterly projections at:

  • 16.2% in Q1,
  • 6.2% in Q2,
  • 4.1% in Q3, and
  • 4% in Q4

Read Also: Quick RBI MPC Update - Repo Rate Hike, Bank Rates & Guv’s Inflation Outlook

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