RBI said, 'Inflation is expected to be more than 4 percent this year

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RBI: The Reserve Bank of India has decided not to increase the repo rate on Thursday. That is, the interest rate will remain at 6.50%. RBI has left rates unchanged for the second time in a row. RBI Governor Shaktikanta Das informed about the decisions taken in the monetary policy meeting today.

According to RBI estimates, inflation is likely to remain above 4% in FY 2023-24 (FY24). Further, real GDP growth is estimated at 6.8% in FY 2023-24 (FY24). 8% in Q1, 6.5% in Q2, 6% in Q3 and 5.7% in Q4.

RBI hiked rates by 2.50% from May 2022 to February 2023
RBI has hiked rates by 2.50% from May 2022 to February 2023. In the previous meeting held in April, the repo rate was maintained at 6.50 percent. Monetary policy meets every two months.

With no change in repo rate, loans will not be expensive, EMI will not increase
RBI has a powerful tool to fight inflation in the form of repo rate. When inflation is high, the RBI tries to reduce the flow of money into the economy by increasing the repo rate. If the repo rate is high, then the loan to the banks from RBI will become expensive. In turn, banks make loans more expensive for their customers. This reduces the flow of money in the economy. If the money flow decreases, demand decreases and inflation decreases.

Similarly, when the economy goes through a bad period, recovery needs to increase money flow. In such a situation, RBI has reduced the repo rate. Due to this, loans from RBI become cheaper for banks and customers also get loans at cheaper rates. Let us understand with this example. When the economic activity came to a standstill during the Corona era, the demand decreased. In such a situation, RBI has increased the flow of money in the economy by reducing the interest rates.

Real GDP growth could be 6.5% in 2023-24
On GDP, RBI Governor Shaktikanta Das said India’s real GDP was seen at 7.2% in FY2023, which is stronger than the earlier estimate of 7%. Taking all factors into account, real GDP growth for 2023-24 could be 6.5%.

Concerns and uncertainty about inflation remain
The RBI governor said that there is still concern and uncertainty about inflation. According to RBI estimates, inflation is likely to remain above 4% in FY 2023-24 (FY24). The RBI has cut the inflation forecast for FY24 to 5.1% from 5.2%.

Know what inflation statistics say?

1. Retail Inflation Rate 4.70% in April
The retail inflation rate has come down to 4.70 percent in April. The inflation rate in March was 5.66%. This was the third month in a row that the inflation rate came down. Not only this, it was also the lowest level of retail inflation since October 2021. Decline in food prices, decline in electricity and fuel prices led to decline in retail inflation.

2. The wholesale inflation rate was -0.92%
In April, the wholesale inflation rate (WPI) fell to -0.92%. Earlier, the wholesale inflation rate in March 2023 was 1.34%. The wholesale inflation rate in February 2023 was 3.85%. This was the 11th consecutive month that wholesale inflation has declined. WPI inflation eased due to fall in food and fuel and power prices.

How is inflation affected?
Inflation is directly related to purchasing power. For example, if the inflation rate is 7%, the earnings of Rs 100 will be only Rs 93. So one should invest keeping in view the inflation. Otherwise the value of your money will decrease.

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