Read the following case study paragraphs carefully and answer the question based on the same. The Reserve Bank of India raised inflation forecasts on the back of higher oil and other raw materials while it maintained the growth forecast at 9.5% for FY22 despite anemic investment demand. Governor Shaktikanta Das said inflation measured by the consumer price index (CPI) might remain close to the upper tolerance band of 6% up to September expecting easing of pressure thereafter on kharif harvest arrivals. [RBI has fixed inflation rate target in between 2%-6 %.] The central bank... Show more Read the following case study paragraphs carefully and answer the question based on the same. The Reserve Bank of India raised inflation forecasts on the back of higher oil and other raw materials while it maintained the growth forecast at 9.5% for FY22 despite anemic investment demand. Governor Shaktikanta Das said inflation measured by the consumer price index (CPI) might remain close to the upper tolerance band of 6% up to September expecting easing of pressure thereafter on kharif harvest arrivals. [RBI has fixed inflation rate target in between 2%-6 %.] The central bank projected CPI at 5.7% for FY22 compared to its earlier projection of 5.1%. 'The supply-side drivers could be transitory while demand-pull pressures remain inert, given the slack in the economy. A pre-emptive monetary policy response at this stage may kill the nascent and hesitant recovery that is trying to secure a foothold in extremely difficult conditions,' Das said. Crude oil prices are volatile with implications for imported cost pressures on inflation, RBI said. The combination of elevated prices of industrial raw materials, high pump prices of petrol and diesel with their secondround effects, and logistics costs continue to impinge adversely on cost conditions for manufacturing and services, although weak demand conditions are tempering the passthrough to output prices and core inflation. Show less
Read the following case study paragraphs carefully and answer the question based on the same.
The Reserve Bank of India raised inflation forecasts on the back of higher oil and other raw materials while it maintained the growth forecast at 9.5% for FY22 despite anemic investment demand. Governor Shaktikanta Das said inflation measured by the consumer price index (CPI) might remain close to the upper tolerance band of 6% up to September expecting easing of pressure thereafter on kharif harvest arrivals. [RBI has fixed inflation rate target in between 2%-6 %.] The central bank projected CPI at 5.7% for FY22 compared to its earlier projection of 5.1%. 'The supply-side drivers could be transitory while demand-pull pressures remain inert, given the slack in the economy. A pre-emptive monetary policy response at this stage may kill the nascent and hesitant recovery that is trying to secure a foothold in extremely difficult conditions,' Das said. Crude oil prices are volatile with implications for imported cost pressures on inflation, RBI said. The combination of elevated prices of industrial raw materials, high pump prices of petrol and diesel with their secondround effects, and logistics costs continue to impinge adversely on cost conditions for manufacturing and services, although weak demand conditions are tempering the passthrough to output prices and core inflation.
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