The Reserve Bank of India (RBI), on 5 August 2022, retained its consumer price inflation projection for 2022-23 at 6.7 per cent, after revising it upwards sharply in April 2022 from 5.7 per cent in February 2022. The apex bank eased its projection for the second quarter of 2022-23 to 7.1 per cent from 7.4 per cent. It revised the projection for the third quarter upwards to 6.4 per cent from 6.2 per cent, while keeping the fourth quarter projection unchanged at 5.8 per cent. The RBI expects inflation to fall sharply to 5 per cent in the first quarter of 2023-24.
The apex bank noted that globally metal prices are easing from their record highs. Crude oil prices too have softened recently, yet are elevated and volatile. Besides, it also expressed concern about the depreciation of rupee against the US dollar adding to the domestic inflation. The RBI was optimistic on food inflation cooling down due to rising kharif output. It, however, added that one needs to be watchful about the shortfall in paddy sowing although the buffer stocks of the cereal are ample.