Time to prioritise inflation over growth: RBI Governor Shaktikanta Das

On April 8, Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the Monetary Policy Committee of RBI has kept the repo rate unchanged at 4 percent but hiked the reverse repo rate by 40 bps to 3.75 percent and emphasized on the need of withdrawal of accommodation in its first policy meeting of FY23. (Image credit: ANI/Twitter)

Inflation projections have been primarily revised upwards due to war-induced factors, according to Reserve Bank of India (RBI) Governor Shaktikanta Das.

"In the sequence of priorities, we have now put inflation before growth. Time is appropriate to prioritise inflation ahead of growth," the RBI governor said

On April 8,  Das stated in his first Monetary Policy Committee (MPC) presentation for the financial year 2022-2023 that consumer price index (CPI) inflation is expected to average 5.7 percent in FY23.

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Inflation is expected to average 6.3 percent in the first quarter (April-June 2022), 5.8 percent in the second quarter (July-September 2022), 5.4 percent in the third quarter (October-December 2022), and 5.1 percent in the fourth quarter (January-March 2023) of this fiscal year.

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Das indicated that edible oil prices are expected to remain high in the short term, and that the rise in crude oil prices since the end of February 2022 as a result of the Russia-Ukraine situation poses a significant risk to the global economy.

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Forecasts anticipate a crude oil price of $100 per barrel, according to the RBI chief. The figure, which was revealed in the central bank's six-monthly Monetary Policy Report on April 7, represents a significant increase over earlier estimates.

The RBI assumed a price of $75 per barrel for the second half of FY22 when forecasting Consumer Price Index (CPI) inflation, according to the October issue of the Monetary Policy Report.