Inflation is going to increase further in the country. After the 3-day long meeting of RBI MPC, Governor Sanjay Malhotra on Wednesday released major figures regarding the economic condition of the country. According to RBI, domestic economic activities remain strong even amidst global uncertainties. The good news on the GDP growth front is that the country’s growth may be 7.1 percent in FY 2027. However, common people may get a shock on the inflation front. Governor Sanjay Malhotra said that inflation may increase in the country.
RBI’s estimate on GDP growth
Real GDP growth for the financial year 2027 has been estimated at 7.1%, which was earlier estimated at 6.7%. The GDP growth rate is likely to remain at 7.1% in the first quarter of the financial year 2028 (Q1 FY28).
What is the situation on the inflation front?
While on one hand the GDP figures are encouraging, on the other hand inflation (CPI Inflation) remains a matter of concern. Retail inflation increased to 4.8% in the month of August, which was 4.5% in July.
CPI inflation is estimated to be 5.2% for the entire financial year. On a quarterly basis, it is likely to be 4.9% in Q2, 6% in Q3 and 5.7% in Q4.
Inflation increased in August mainly due to unfavorable base effects, increase in prices of select commodities like sugar and onion and rise in food and fuel prices.
Manufacturing and future challenges
PMI figures for both manufacturing and services in the second quarter (Q2) remain in the expansionary zone, although the pace has slowed down slightly compared to the first quarter. Governor Sanjay Malhotra said that although supply-side pressures are limited, it is difficult to separate out the second-round effects from the impacts on energy and other input costs, which is being closely monitored by the RBI.
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Source: ndtv.in
