ALSO READRBI monetary policy: Repo rate unchanged at 6%, inflation forecast hiked RBI monetary policy: Repo rate kept unchanged at 6% RBI keeps repo rate unchanged at 6%; full text of policy statement RBI keeps rates unchanged: Don't expect miracles till March 2018 RBI monetary policy: Pause now, cut in December
Having a fiscal stance conducive to achieving 4% CPI target is desirable. Shifting away from stated fiscal path is not conducive to our objectives, says RBI Governor Urjit Patel Key takeaways — Repo rate unchanged — Inflation forecast raised — Inflation Outlook: CPI inflation for 2018-19 is estimated in the range of 5.1-5.6 percent in H1, including diminishing statistical HRA impact of central government employees, and 4.5-4.6 percent in H2, with risks tilted to the upside. RBI monetary policy committee The MPC notes that the inflation outlook is clouded by several uncertainties on the upside. OUTLOOK RBI monetary policy committee Taking into consideration the above factors, GVA growth for 2018-19 is projected at 7.2 per cent overall – in the range of 7.3-7.4 per cent in H1 and 7.1-7.2 per cent in H2 – with risks evenly balanced. OUTLOOK RBI monetary policy committee Turning to the growth outlook, GVA growth for 2017-18 is projected at 6.6 per cent. Beyond the current year, the growth outlook will be influenced by several factors. 1. GST implementation is stabilising, which augurs well for economic activity. 2. There are early signs of revival in investment activity as reflected in improving credit offtake, large resource mobilisation from the primary capital market, and improving capital goods production and imports. 3. The process of recapitalisation of public sector banks has got underway. Large distressed borrowers are being referenced for resolution under the Insolvency and Bankruptcy Code (IBC). This should improve credit flows further and create demand for fresh investment. 4. Although export growth is expected to improve further on account of improving global demand, elevated commodity prices, especially of oil, may act as a drag on aggregate demand. OUTLOOK RBI monetary policy committee The projected moderation in inflation in the second half is on account of strong favourable base effects, including unwinding of the 7th CPC’s HRA impact, and a softer food inflation forecast, given the assumption of normal monsoon and effective supply management by the Government.