RBI MPC meeting: Inflation to GDP forecast, here’s a quick recap of key numbers from the last policy review

Reserve Bank of India (RBI) Governor Shaktikanta Das will announce the decisions taken in the Monetary Policy Committee (MPC) meeting, held from April 3 to April 5, in a press conference at 10 a.m. today. Ahead of the much-awaited announcement, here’s a look at the key numbers from the last policy review meet held in February.

The central bank had then kept the repo rate – the rate at which it lends to commercial banks – unchanged at 6.5%. This was the sixth consecutive MPC meeting where the status quo was maintained on repo rate.

The RBI had also refrained from changing its stance – ‘withdrawal of accommodation’ – even as speculations were rife that it could have been amended to ‘neutral’. The banking sector regulator was of the view that the inflation, hovering around 5%, is still above its medium-term target of 4%.

Here’s a quick recap of the last RBI MPC meeting:

• The policy repo rate under the liquidity adjustment facility (LAF) was kept unchanged at 6.50%. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.
• The RBI had said that real gross domestic product (GDP) was expected to grow by 7.3%, year-on-year (y-o-y) in 2023-24, underpinned by strong investment activity. On the supply side, gross value added (GVA) expanded by 6.9% in 2023-24, with manufacturing and services sectors as the key drivers.
• Real GDP growth for 2024-25 was projected at 7.0 % with Q1 at 7.2%; Q2 at 6.8%; Q3 at 7.0%; and Q4 at 6.9%. The risks were evenly balanced, RBI had said.
• Retail inflation was projected at 5.4 % for 2023-24 with Q4 at 5.0%. Assuming a normal monsoon next year, CPI inflation for 2024-25 is projected at 4.5% with Q1 at 5.0%; Q2 at 4.0%; Q3 at 4.6%; and Q4 at 4.7%.
• “Global growth is likely to remain steady in 2024 after a surprisingly resilient performance in a turbulent year gone by. Inflation is edging down from multi-decade highs, with intermittent upticks. Financial market sentiments have been fluctuating with changing views about an early pivot by central banks in advanced economies,” the RBI had further noted.