RBI Annual Report 2023-24: Inflation to ease further, MPC focused on price stability

RBI Annual Report 2023-24: Inflation to ease further, MPC focused on price stability

Banking regulator RBI has on May 30 released its annual report for 2023-24, highlighting that macro-economic fundamentals remain strong, with headline inflation expected to moderate further.

The RBI flagged risks to food inflation saying that it remains vulnerable to supply-side shocks. The MPC will remain resolute in its pursuit of price stability, the annual report said.

RBI had a net income of Rs 2.11 lakh crore in the financial year 2024, up from Rs 87,420 crore in the previous year with a jump in interest income from foreign securities, its annual report released on Thursday showed.

The Reserve Bank of India saw a gain of Rs 83,616 crore from foreign exchange transactions during the year, while interest income from foreign securities rose to Rs 65,328 crore, which allowed it to increase the size of its contingency fund, the report showed.

The RBI's balance sheet size increased by 11.08% during the financial year to Rs 70.48 lakh crore.

"Consumption demand, especially in rural areas, to spur as headline inflation eases towards targeted level. Indian economy well-placed to step up growth trajectory over next decade in environment of macroeconomic and financial stability," said the report.

External sector's strength, forex reserves buffer will insulate domestic economic activity from global spillovers. Indian economy would have to navigate challenges posed by rapid adoption of AI/ML technologies, recurrent climate shocks, the report added.

Geopolitical tensions, global commodity price movements, erratic weather developments pose downside risks to growth outlook, the report said.

GDP growth robust on back of solid investment demand, which is supported by healthy balance sheets of banks and corporates. MSPs for both kharif and rabi seasons 2023-24 ensured minimum return of 50% over cost of production for all crops, the report further said.