RBI raises inflation forecast sharply, price pain to remain

As inflation continues to haunt the common man, the RBI is warning it is going to be painful for a long time. The central bank raised their inflation forecast for the year sharply and now expects the full-year CPI to average above its tolerance level. Here are the projections-:

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FY 23 CPI projected at 6.7% vs 5.7% earlier
Q1 CPI seen 7.5% at vs 6.3% earlier
Q2 CPI seen 7.4 % at vs 5.8% earlier
Q3 CPI seen 6.2% at vs 5.4% earlier
Q4 CPI seen 5.8% at vs 5.1% earlier

RBI Governor Shaktikanta Das said the upside risk to inflation persists and the recent spike in tomato prices would fuel food inflation. Also, high global crude oil prices would add to the upside pressure on inflation.

The upward revision in inflation projection comes as domestic retail inflation has remained above RBI's comfort level of 6 per cent for four months in a row, mainly due to the Russia-Ukraine war which has impacted the prices of commodities across the globe.

Das said normal south-west monsoon would boost kharif sowing and agri output. However, global geo-political situation remains fluid and commodity market remains on the edge.

A rise in price across all items from fuel to vegetables and cooking oil pushed WPI or Wholesale Price Inflation to a record high of 15.08 per cent in April and retail inflation to a near eight-year high of 7.79 per cent.

RBI has the mandate to keep inflation at 4 per cent with a bias of 2 per cent on either side. - With inputs from PTI