The Reserve Bank’s 4% objective for retail inflation is not being met as quickly due to pressure on food prices.
The recurring occurrence of brief amplitude food price pressures prevents a faster decline in headline inflation towards the target of 4%, even if core inflation is broadly dropping. The world economy is losing momentum, with growth in some of the strongest economies decreasing and high-frequency indicators suggesting further leveling off shortly.
In the third quarter of the fiscal year 2023–24, India’s real GDP growth reached a six-quarter high, driven by solid indirect taxes, lower subsidies, and strong momentum. Future growth catalysts are probably going to come from the great visibility of structural demand and stronger balance sheets of corporations and banks.
The Reserve Bank of India remarked that the opinions stated in the Bulletin article are those of the writers and do not necessarily reflect the opinions of the central bank.