The central bank’s policy interventions are particularly significant as it has scaled down its growth forecast for the current financial year to 9.5 per cent, compared to 10.5 per cent it had projected earlier.
The MPC revised its inflation outlook slightly higher compared to previous estimates. The RBI has projected retail inflation, as measured by the Consumer Price Index (CPI) at 5.1 per cent in 2021-22. Its quarterly forecasts for inflation are 5.2 per cent in Q1, 5.4 per cent in Q2, 4.7 per cent in Q3 and 5.3 per cent in Q4 versus its earlier estimate of 5.2 per cent for Q1, 5.2 per cent for Q2, 4.4 per cent for Q3 and 5.1 per cent for Q4.
The latest inflation projections, though higher than the previous forecasts, is still within the RBI’s comfort zone of 2-6 per cent. This, Das said, provides authorities with some elbow room for more actions to shore up demand and push for growth.