RBI Sees Inflation At 5.1% During 2021-22

The Reserve Bank of India (RBI) sees consumer price inflation at around 5.1% during 2021-22, with upside risks coming from the Covid second wave.

"On the outlook for inflation, the favourable base effects that brought about the moderation in headline inflation by 1.2 percentage points in April, may persist through the first half of the year, conditioned by the progress of the monsoon 4 and effective supply side interventions by the Government. Upside risks to inflation emanate from persistence of the second wave and consequent restrictions on activity on a virtually pan-India basis.

In such a scenario, insulating prices of essential food items from supply side disruptions will necessitate active monitoring and preparedness for coordinated, calibrated and timely measures by both Centre and states to prevent emergence of supply chain bottlenecks and increase in retail margins. 11. Taking into consideration all these factors, CPI inflation is projected at 5.1 per cent during 2021-22: 5.2 per cent in Q1; 5.4 per cent in Q2; 4.7 per cent in Q3; and 5.3 per cent in Q4 of 2021-22, with risks broadly balanced," the RBI said in a release.

The country's central bank today left the repo rate unchanged. Mr. Annuj Goel, Managing Director, Goel Ganga Developments said, "As per our expectations, the Reserve Bank of India (RBI) has retained the benchmark interest rate at the existing levels at its monetary policy review as MPC voted to keep accommodative stance and keeping the interest rate unchanged. We welcome this move by RBI's rate-setting panel MPC of retaining benchmark interest rate. It's relief from the Central bank in the wake of inflation and with regard to the second wave of the COVID-19 pandemic."