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India’s Retail Inflation may be at 5.7-6.9% in FY23, say Economists

Published on June 04, 2022
Current Context: Recently RBL Bank chief economist Rajni Thakur estimated the inflation rate at 5.75% for FY23 compared to the 6% projected earlier.
India’s Retail Inflation may be at 5.7-6.9% in FY23, say Economists
  • Reserve Bank of India’s monetary policy committee (MPC) is likely to decide on the exact rate hike based on its inflationary expectations.
  • Many factors like Retail inflation touched a nearly eight-year high of 7.7% in April on other hand WPI inflation increased by 15.1%.
  • It has been estimated that CPI will still likely average above the RBI 6 percent upper tolerance limit in FY23.
  • According to the ICRA chief economist, the high WPI inflation is being driven by commodity prices.
  • It has also believed that MPC will raise the policy rate by at least 75 bps in the rest of FY23 and 50 bps in June and another 25 bps in October.
  • Along with it, the cash reserve ratio could also be hiked by 50 bps to 5 percent by the FY23 end.

Question:

Q.1 According to the RBL chief what will be the range of retail inflation to be maintained for FY23?
a. 5.7-6.9%
b. 7.5-6.2%
c. 8.2-8.5%
d. 5.1-6.5%
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