Food Price Volatility Remains a Risk, Says RBI Bulletin

The reserve bank of india (RBI) has highlighted that food price volatility continues to pose a contingent risk, despite overall retail inflation staying below the 4% target for two consecutive months in August. This information comes from the latest Bulletin released on Friday.

The september Bulletin indicates a slowdown in global economic activity and notes a sluggish pace of disinflation, leading to increased caution among monetary policy makers. An article titled "State of the Economy" mentions that while consumer price index inflation fell below the RBI's target for the second month in a row, food price volatility still represents a significant risk.

Authored by a team led by RBI Deputy governor Michael Debabrata Patra, the article states that India’s domestic drivers—private consumption and gross fixed investment—remain strong, with net exports positively contributing to GDP growth during the April-June period of this financial year. The underperformance in agriculture has been offset by a robust manufacturing sector and resilient services.

Looking ahead, household consumption is expected to accelerate in the second half of the fiscal year as headline inflation eases, with signs of reviving rural demand already emerging.
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Subashini

21/09/2024 05:32 PM