Inflation to ease to 4.6% in the first three quarters of 2024-25: RBI

The RBI bulletin released on Wednesday said that global growth continues to remain fragile and may slow down further in 2024

The inflation in India is expected to ease to 4.6 per cent in the first three quarters of 2024-25 (FY25), the Reserve Bank of India (RBI) said in its December 2023 bulletin on Wednesday. In November, India reported retail inflation at a three-month high level of 5.6 per cent. "CPI inflation rose to 5.6 per cent in November as the recurrence of food price spikes punctured a brief respite in September and October, but it is expected to ease to 4.6 per cent in the first three quarters of 2024-25," the RBI said.   The central bank said that global commodity prices, particularly of agricultural commodities, have softened except for rice. It, however, pointed out that the outlook on inflation in the near future will be influenced by uncertain food prices. "High-frequency food price indicators point to an increase in prices of key vegetables which may push CPI inflation higher in the near term. The ongoing rabi sowing progress for key crops like wheat, spices and pulses needs to be closely monitored. Elevated global sugar prices is also a matter of concern," it said in the bulletin. The inflation has been projected at 5.4 per cent for 2023-24, in line with the Monetary Policy Committee (MPC) announcement earlier this month. "CPI inflation for Q1FY25 is projected at 5.2 per cent; Q2 at 4.0 per cent; and Q3 at 4.7 per cent. The risks are evenly balanced," the RBI said. The bulletin further suggested that, on the basis of data till Q2FY24, there is a very low probability of only 1 per cent of the risk of stagflation in India. Stagflation is a portmanteau of economic stagnation with high inflation.