By Malvika Gurung
Investing.com -- The Monetary Policy Committee (MPC) of RBI has retained the country’s inflation projection for the current financial year at 6.7% amid upside risks from food inflation.
The central bank expects inflation to fall to 5% by the first quarter of the next financial year (FY24), which is under the tolerance range of 2-6%. It expects inflation to remain elevated at around 6% in the second half of the ongoing year FY23.
RBI has projected the real GDP growth for FY23 at 7%, down from its figure estimated at the previous MPC meet of 7.2%.
Further, the quarterly GDP growth forecasts for FY23 have been revised too. Here are the tweaked figures.
- 6.3% (from 6.2%) in Q2,
- 4.6% (from 4.1%) in Q3,
- 4.6% (from 4%) in Q4.
For the first quarter of the next fiscal year 2023-24, the GDP growth figure has been revised to 7.2%.
“If high inflation is allowed to linger, it could lead to second round effects,” said RBI Governor Shaktikanta Das.
On Friday, the central bank’s MPC hiked the repo rate by 50 basis points for the third consecutive time, taking the benchmark lending rate to 5.9%, while maintaining its ‘Withdrawal of Accommodation’ stance to tame the soaring inflation.
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