Conditions in India are favorable for continued economic growth, according to the RBI’s April Bulletin released on Tuesday. However, extreme weather events and prolonged geopolitical tensions may pose a risk to inflation. The Bulletin highlights the need for careful monitoring during the summer months as overlapping food price shocks occur. An above-normal Southwest monsoon, as projected by the IMD, is expected to ease food price pressures later this year. Retail inflation based on the Consumer Price Index (CPI), which the RBI factors into its monetary policy, eased to 4.9% in March after remaining at 5.1% during the two preceding months. The Bulletin also notes that global weather agencies agree that March 2024 was the warmest March on record, with the global surface temperature 1.6 degrees Celsius (3.01°F) above the 1880-1899 period. The RBI warns that extreme weather events and prolonged geopolitical tensions could keep crude oil prices volatile and pose a risk to inflation in the near term.
Indian Economy Shows Signs of Optimism, but Inflation Concerns Remain
