Inflation Prediction Raised To 4.8%

Mumbai: The Reserve Bank of India (RBI) on Friday raised the inflation projection for current fiscal year to 4.8 per cent from 4.5 per cent with Governor Shaktikanta Das saying lingering food price pressures are likely to keep headline inflation elevated in the December quarter.

Consumer price index (CPI)-based inflation rose sharply in September and October 2024 led by an unanticipated increase in food prices.

Core inflation, though at subdued levels, also registered a pick-up in October. Fuel group remained in deflation for the 14th consecutive month in October.

“In the near term, despite some softening, lingering food price pressures are likely to keep headline inflation elevated in Q3,” Das said, while unveiling the December 2024 monetary policy. RBI said CPI inflation for 2024-25 is projected at 4.8 per cent, with Q3 at 5.7 per cent; and Q4 at 4.5 per cent. CPI or retail inflation for Q1:2025-26 is projected at 4.6 per cent, and Q2 at 4 per cent.

In the October policy, the central bank had estimated the inflation at 4.5 per cent for the fiscal ending March 2025.

“Going ahead, a good Rabi season would be critical to the softening of the food inflation pressures.