Retail inflation, or CPI, which eased to 3.6% in July and 3.7% in August, jumped to a nine-month high of 5.49% in September, driven by food price hikes. It is expected to remain elevated in October, with projections suggesting a moderation from the last quarter of the fiscal year, according to Reserve Bank of India (RBI) Governor Shaktikanta Das. Speaking at Macro Week organized by the Peterson Institute for International Economics, Das noted that unexpected weather events and geopolitical conflicts could pose risks to inflation control.
For FY2025, the RBI forecasts inflation at 4.5%, aiming for a durable descent to a 4% target. Das highlighted India’s strong economic fundamentals, emphasizing that domestic demand, private consumption, and investment are driving growth. The RBI maintained a GDP growth forecast of 7.2% for FY2025, buoyed by robust manufacturing and service sectors and improved input costs.
Das also emphasized the impact of global geopolitical tensions, resulting in trade restrictions and economic fragmentation. He called for the G20’s role in fostering open trade and advocating for reforms in the international financial system to improve representation for emerging economies.
