RBI raises retail inflation forecast for FY2023 by 6.7%

RBI MPC has increased the prediction for inflation to 6.7%, and MPC has also decided to focus on the withdrawal of accommodation.

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Since last week, intermittent speculation has been hovering across all media outlets concerning the hikes introduced by the RBI. As the inflationary trends in the country are soaring high, the hikes were expected on the part of RBI.

In this context RBI Governor, Shaktikanta Das has raised the expected inflation forecast for the FY23 to 6.7% from the previous 5.7% expected earlier.

In the meeting of the monetary policy committee, the committee raised the repo rate by 50 basis points to 4.90 points as announced by the Governor, adding that the MPC is focused on the withdrawal of accommodation for the maintenance of the inflation within the target fixed. The MPC voted unanimously for the increase in the repo rate.

An estimation of 10 economists predicts that. The inflation driven economy might force the central bank to increase the repo rate even further. And can even go up to 80 basis points. Thus, this increase in repo rate might lead to a great impact on the day-to-day lives of the people. As the repo rate has a direct impact on their buying and selling power.

The situation in Ukraine continues, and India faces new obstacles every day, exacerbated supply chain issues, according to Das. According to him, the conflict has resulted in the globalization of inflation.

The RBI has also decided to keep India’s growth rate at 7.2 per cent for FY23. Last quarter, India’s economic growth slowed even further as a result of global supply constraints and increasing input costs.