HEADLINE INFLATION
Stable inflation is important to sustain growth: RBI Guv Das
RBI Governor Shaktikanta Das reaffirmed the central bank's commitment to achieving the 4% inflation target, effectively ruling out immediate rate cuts. His comments come amidst calls for rate reductions from government officials. While acknowledging the need for growth, Das emphasized price stability as crucial for sustainable economic progress, particularly for the Global South.
RBI committed to moderate inflation to mandated 4%, dashing hope of a rate cut
RBI Governor Shaktikanta Das stated that the central bank is committed to achieving the 4% inflation target. He emphasized that macroeconomic stability is a shared responsibility of the central bank and the government. Das highlighted the importance of price stability for sustained growth. He acknowledged the challenges faced by the global economy and the need for careful policymaking.
Indian economy¡¯s road to recovery? Private consumption driving domestic demand again, says RBI
The Reserve Bank of India's latest bulletin highlights that India's economic slowdown in Q2 of 2024-25 has eased, with private consumption driving domestic demand, especially boosted by festival spending in Q3. Despite global economic resilience, the RBI noted challenges such as rising protectionism and fragile confidence.
RBI warns unchecked inflation could harm India's real economy, despite strong growth outlook
Despite festive spending and a recovering agricultural sector boosting the Indian economy, rising inflation threatens to undermine growth, particularly in industry and exports, according to RBI researchers. While financial markets experience corrections due to a strengthening US dollar and foreign investment outflows, the RBI remains committed to price stability and growth.
India in a sweet spot: Moody's report highlights robust economic growth momentum amid inflation challenges
India's economy is experiencing robust growth, projected to hit 7.2% in 2024, driven by strong consumer spending and investment. Despite recent inflation spikes due to food prices, Moody's predicts moderation and highlights India's strong economic fundamentals and resilient financial position.
India's middle class tightens its belt, squeezed by food inflation
India's middle class is tightening its belt as high inflation eats into their spending power. This slowdown in urban consumption, evident in declining sales of everything from cookies to restaurant meals, threatens India's economic growth. While official projections remain optimistic, some economists are less sanguine, pointing to shrinking wages and rising costs as key factors impacting urban spending.
Rate cut unlikely even in February, inflation to dip January onwards: SBI research
The Reserve Bank of India may not reduce interest rates in February. Inflation is a concern. SBI Research predicts inflation will ease slightly from January. However, this easing will be due to base effects and not lower prices. Food inflation, particularly for vegetables, remains high in many states. SBI Research believes the first rate cut will happen after February 2025.
India's retail inflation in October quickens to 6.21%, breaches RBI tolerance band for first time since Aug 2023
India's retail inflation rose to 6.21 percent in October. This is a significant increase from September's 5.49 percent. Food prices are the main reason for this surge. This is the first time since August that inflation has gone beyond the Reserve Bank of India's 6 percent limit. The rise in onion prices is a major concern.
CPI inflation is likely to breach 6% in October: UBI report
The continued spurt in food prices and fading of the high base effect likely led to a spike in October retail inflation figures. According to a report by the Union Bank of India, retail inflation based on the Consumer Price Index is seen jumping to 6.15 per cent, breaching RBI's 6 per cent tolerance band.
RBI rate cut on cards? The inflation 'horse' is still a concern for Shaktikanta Das
RBI Governor Shaktikanta Das cautioned against interpreting the recent shift to a neutral monetary policy stance as a signal for imminent rate cuts. Despite speculation, Das emphasized that reducing interest rates now would be risky given the "significant upside risks to inflation.
India's factory growth accelerates in October, PMI shows
India's manufacturing sector saw significant growth in October after three months of slowdown. Improved demand boosted job creation and a positive business outlook. New orders, both domestic and international, surged. Despite higher inflation, the outlook remains optimistic with increased hiring and strong consumer demand expected to continue.
Why headline inflation may not be the most accurate to 'gauge' demand in Indian economy
The Finance Ministry's Economic Survey indicates softening inflation expectations in India, with underlying demand remaining stable despite food price fluctuations. It emphasizes that core inflation remains within a comfortable range, and projections for a healthy kharif harvest are expected to mitigate future price pressures.
India's headline inflation expected to moderate from Q4 of this financial year: RBI Governor Shaktikanta Das
India's inflation trajectory is expected to moderate from Q4 of the fiscal year, despite risks posed by unexpected weather events and geopolitical conflicts, according to RBI Governor Shaktikanta Das. The focus remains on achieving a durable 4% inflation level amid resilient economic growth. Das also emphasized the need for global financial reforms to include better representation for emerging economies.
Rate hikes since May '22 helped reduce inflation by 1.60%: RBI paper
A paper by senior Reserve Bank of India (RBI) staff revealed that the central bank's cumulative rate hikes of 2.5 percentage points since May 2022 have negatively impacted headline inflation by 1.60%. The study, which does not reflect the official views of the RBI, indicated that these rate increases have helped anchor inflation expectations and modulate aggregate demand, resulting in disinflationary effects.
Lower the drawbridge today, RBI
RBI is expected to decide on a potential 25 basis points cut in its policy rate as inflation remains below the target level. With a slowing growth momentum and a cooling down of food inflation, it's crucial for supporting economic growth. Global central banks are also reducing rates, adding pressure on RBI's decision.
MPC should pay more heed to core inflation, says outgoing member Ashima Goyal
Ashima Goyal, a member of India's Monetary Policy Committee, emphasized the importance of focusing on core inflation for long-term household inflation expectations. She suggested that the committee should provide guidance on liquidity conditions. Goyal highlighted that recent interventions in India's monetary policy have helped lower inflation and stressed the need for supply-side action to ensure non-inflationary growth.
India should retain headline inflation as target, external rate panel members say
External members of India's rate-setting panel suggested keeping headline inflation as the target for monetary policy. They emphasized that headline inflation captures overall price pressures including volatile food and fuel prices. While core inflation has been low, targeting headline inflation is crucial as it directly impacts the public. Persistently high food prices have influenced recent monetary policy decisions.
India¡¯s wholesale inflation eases to 3-month low of 2.04% in July
In July, India's wholesale inflation, measured by the Wholesale Price Index, eased to 2.04% annually from a 16-month high of 3.36% in June, surpassing a Reuters poll estimate of 2.39%. Retail inflation also slowed to 3.54%, the lowest in nearly five years, driven by a sharp drop in food prices.
Food inflation to stay sticky, rate cuts may get pushed to FY26: Economists
Despite consumer inflation dipping below the 4% target for the first time in five years, the Reserve Bank of India (RBI) is unlikely to soften interest rates this fiscal year. Economists attribute the drop to a base effect and caution that it may not signify a lasting trend against persistent inflation. Central bank Governor Shaktikanta Das emphasized that future rate decisions will be influenced by food price movements and ongoing inflation pressures. The RBI has revised its inflation forecasts upward for the current and next quarter, projecting 4.4% and 4.7% respectively.
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