Momentum in Indian economy in Q2 FY24, inflation concern: RBI article

18 Aug '23

1 min read

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Though India's economy is gathering momentum in the second quarter of fiscal 2023-24 in a stressed global environment, inflation would continue to average above the Reserve Bank of India's (RBI) comfort zone of 6 per cent, an RBI monthly bulletin article said.
While core inflation moderated, headline inflation is expected to average well above 6 per cent in Q2 FY24.

Though India’s economy is gathering momentum in the second quarter (Q2) of fiscal 2023-24 in a stressed global environment, inflation would continue to average above the Reserve Bank of India’s (RBI) comfort zone of 6 per cent, an article in the latest RBI monthly bulletin said.

The consumer price index-based retail inflation witnessed a significant rise in July to 7.44 per cent from 4.87 per cent in June.

"While core inflation witnessed a moderation, headline inflation is expected to average well above 6 per cent in the second quarter," the article, authored by a team led by RBI deputy governor Michael Debabrata Patra, said.

With industrial production and trade weakening, the global recovery is slowing after a robust Q1 FY24 performance.

Domestic drivers such as private consumption and fixed investment are offsetting the drag from the contraction in exports, it added.

ALCHEMPro News Desk (DS)

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