“The war on inflation is not over. We have to be vigilant and there is no reason for complacency. We have to see how El Nino plays out,” Das said in his speech here. Confederation of Indian Industry (CII) Annual Session 2023, as they identified the risks posed by the possible weather phenomenon.
Das said it would not be surprising if last year’s GDP growth is above the projected 7% as several indicators showed strong expansion.
The RBI governor also said that the next print for retail inflation, which is due at the end of next month, could be lower than the 4.7% recorded in April. Retail inflation eased to an 18-month low in April on a favorable base effect and softening of some food prices, providing much-needed relief from stubborn price pressures.
Das said the change in interest rates depends on the ground situation and reiterated his statement that “this is a pause and not a pivot”, referring to the decision to hold interest rates in the last Monetary Policy Committee meeting and Impact assessed. The interest rate goes up. At its April meeting, the central bank decided to hold off on its rate hike, citing “geopolitics, economic activity, price pressures and unprecedented uncertainty in financial markets”.
The RBI governor said that growth prospects this year remain strong and at this juncture, confidence is instilled by the fact that agriculture has performed well and there are forecasts of a normal monsoon. He said the services sector is doing very well, while merchandise exports have come down.
He said that the capital expenditure and infrastructure spending by the government has also increased and huge provisions have been made in it. Budget For capital expenditure by the government. “There are downside risks, which we all know: geopolitical uncertainties, any surprises on the geopolitical front and a drag on merchandise exports as world trade appears to be shrinking,” Das said. He also identified the risk to agriculture from the El Niño effect.