RBI Projects CPI Inflation At 5.7 Per cent In 2022-23

The Reserve Bank of India has projected the CPI inflation at 5.7 per cent in 2022-23 and 6.3 per cent in Q1.

"Looking ahead, the record foodgrains production in 2021-22, ample foodgrains buffer stocks and the government's supply side interventions augur well for food inflation in 2022-23 on the assumption of a normal monsoon. Taking into account the initial conditions, signals from forward-looking surveys, estimates from structural and other time-series models, and crude oil (Indian basket) at US$ 100 per barrel in 2022-23," the RBI has said in a release today.

After easing to 4.3 per cent in September 2021, CPI inflation rose in the following months to reach 6.1 per cent in February 2022, driven by the increase in food inflation. Looking ahead, the three months and one year ahead median inflation expectations of urban households increased marginally by 10 bps each in the March 2022 round of the Reserve Bank's survey.

"The proportion of respondents expecting the general price level to increase by more than the current rate also increased for both the three months and one year ahead horizons vis-à-vis the previous round," the RBI has further added.