On Friday, the Monetary Policy Committee (MPC) of the Reserve Bank of India kept the repo rate unchanged at 4 percent and maintained an 'accommodative' stance. The MPC is of the view that the inflation will likely to remain elevated with some relief from Kharif harvest.
RBI Governor Shaktikanta Das said, "Project CPI inflation at 6.8 percent in Q3FY21, 5.8 percent for Q4FY21, 5.2-4.6 percent in H1FY22 with risks broadly balanced. However, expect some relief in CPI inflation in the winter months. "
He further said that signs of recovery are far from broad-based and for that policy support will be needed. Further efforts will also be necessary to mitigate the inflationary pressures. The inflation spiral is being fueled by supply chain disruptions, excessive margins and indirect taxes, added Das.
According to MPC, proactive supply management can reduce food prices.
On GDP, the Governor said that the RBI has projected the real GDP growth for FY21 at -7.5 percent as against -9.5 percent projected earlier.
He further added that the economy is expected to witness positive GDP growth in the second half of FY21 (H2FY21) .
RBI sees Q4FY21 GDP at +0.7 percent versus +0.5 percent earlier. The Q3FY21 GDP growth is projected at 0.1 percent.
First Published: Dec 4, 2020 10:29 AM IST
