October inflation may drop below 7%, says RBI
New Delhi, October 12
The Reserve Bank of India (RBI) and economists anticipate that inflation for October to drop to less than seven per cent.
Shaktikanta Das, RBI Governor, said price rise was a major challenge but he was hopeful of October inflation to be lower than 7 per cent due to measures taken by the government and the RBI in the past six to seven months.
Retail inflation in September had increased to 7.4 per cent from 7 per cent in August due to high food and energy costs.
Price rise a challenge, but RBI hopeful
Price rise is a major challenge, but I am hopeful of October inflation to be lower than 7 per cent due to measures taken by the government and the RBI in the past six to seven months. —Shaktikanta Das, RBI governor
The Ministry of Statistics and Programme Implementation will release the retail inflation data for October on Monday.
Speaking at an event here today, the RBI chief acknowledged that inflation higher than 6 per cent would hurt growth. His observation comes a day after Moody’s cut India’s growth projections for 2022 to 7 per cent from the earlier 7.7 per cent.
According to a Moneycontrol poll of 16 economists, inflation is expected to have fallen to 6.7 per cent in October from 7.41 per cent in September due to a favourable base effect. If the prediction holds, this would be the lowest inflation rate since February or at least since July when it was 6.71 per cent.
However, at 6.71 per cent, inflation will still remain above the RBI’s upper limit of six per cent for the tenth successive month.
Earlier this month, the RBI’s monetary policy committee had convened a special meeting to prepare an official explanation to the Central government explaining why it failed to keep inflation within the tolerable target band of 2-6 per cent for three consecutive quarters.
This report will focus on the reasons behind the failure to achieve inflation target as well as focus on remedial actions and the proposed time frame to bring inflation to a midpoint level. It will, however, not be made public.
