Key Highlights:
- RBI kept the interest rates unchanged with the
stance at ‘Withdrawal of Accommodation’.
- The FY24 inflation forecasts were kept unchanged
at 5.4%. However, the GDP forecast was revised upwards at 7.3% citing
buoyant macroeconomic indicators and strong consumer demand.
- Throwing water on the
stance change expectations, Mr. Das highlighted that even though FY25 CPI
forecast is 4.5%, the CPI inflation target
continues to be 4.0%.
|
CPI and GDP
Forecast |
||
|
|
CPI |
GDP |
|
FY24 |
5.4 |
7.3 |
|
FY25 |
4.5 |
7.0 |
|
Q1 FY25 |
5.0 |
7.2 |
|
Q2 FY25 |
4.0 |
6.8 |
|
Q3 FY25 |
4.6 |
7.0 |
|
Q4 FY25 |
4.7 |
6.9 |
- RBI’s outlook on growth front remains positive.
Inflations continues to remain above RBI’s tolerance band of 4-6%, driven
by volatile vegetable prices.
- Liquidity:
- “Systemic liquidity turned
into deficit in September 2023 after a gap of four-and-a-half years. But
after adjusting for government cash balances, potential liquidity in the
banking system is still in surplus,” Mr.Das said.
- RBI would continue to be
prudent in the liquidity management. The deficit since December is due to
a confluence of seasonal and ad-hoc macro factors.
- RBI’s fresh Acknowledgments:
- Gov Das emphasised that the
public debt to GDP ratio (esp. in Advanced Economies) is raising serious
concerns, with global debt to GDP ratio expected to reach 100% by 2030.
- However, unlike other nations,
India might avoid this concern. As highlighted in the Interim budget,
Indian Govt. is focussed on Fiscal consolidation, targeting to reduce its
fiscal deficit to below 4.5% of GDP by 2025-26.
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