Food price shocks not good for inflation: Das

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Recurring food price shocks and conflicts around the globe pose a challenge in dealing with inflation, Reserve Bank Governor Shaktikanta Das said on Thursday.

The governor said stable and low inflation will give the necessary support for economic growth.

“We remain vigilant to navigate through the last mile of disinflation as it is often the most difficult part of the journey. We firmly recognise that stable and low inflation will provide the necessary bedrock for sustainable economic growth,” the governor said.

The country has successfully faced several challenges and is now the fastest-growing major economy in the world. Speaking at the 59th SEACEN Governors’ Conference, he said “prudent monetary and fiscal policies have paved the path for India’s success in sailing through these rough waters. The Reserve Bank projects the Indian economy to grow by 7.0 per cent during 2024-25, marking the fourth successive year of growth at or above 7 per cent.”

Retail inflation has cooled from the highs of 2022 and is now nearing the 4%-mark which RBI has kept as the target. In January, the inflation came in at 5.1%.

While monetary policy worked on anchoring inflation expectations and quelling demand-pull pressures, supply-side interventions by the government alleviated supply-side pressures and moderated cost-push inflation. Effective fiscal-monetary coordination was at the core of India’s success, he added.

The governor said the global economy stands at a crossroads, and challenges remain in plenty, but new opportunities are also knocking at the door.