RBI Flags Adverse Weather, Geopolitical Tensions As Inflation Risks

(MENAFN- KNN India) Mumbai, Apr 24 (KNN) The Reserve Bank of India (RBI) has warned that adverse weather conditions and extended geopolitical conflicts leading to volatile crude oil prices may pose a threat to inflation in the near term.

In its monthly bulletin, the RBI stated that consumer price index (CPI) inflation moderated to 4.9 per cent in March after averaging 5.1 per cent in the preceding two months.

However, food inflation remains elevated, posing a risk to the disinflation trajectory.

The central bank highlighted that careful monitoring during the summer is warranted as overlapping food price shocks play out, before the expected above-normal Southwest monsoon provides relief.

The article prepared by RBI Deputy Governor Michael Patra and other officials noted that extreme weather events, as warned by the World Meteorological Organisation, could impact inflation alongside prolonged geopolitical tensions affecting crude oil prices.

On the economic front, the RBI expressed optimism about India's growth prospects, stating that conditions are shaping up for an extension of the trend upshift that took the average real GDP growth above 8 per cent during 2021-24.

However, it emphasised the need for sustaining high growth rates to reap the demographic dividend and achieve developmental aspirations over the next three decades.

(KNN Bureau)

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