RBI Governor Says Inflation, Growth Projections Revised Due To Russia-Ukraine War

Reserve Bank of India (RBI) Shaktikanta Das on Friday said that inflation and growth projections have been revised due to the Russia-Ukraine war. He informed that inflation has been especially revised upwards as the conflict has led to a rise in global crude oil and edible oil prices.

Addressing a press conference after announcing the Monetary Policy Committee's (MPC) decision to keep the key lending rates unchanged, Mr Das said that crude oil prices have been fluctuating on a daily basis, and therefore the situation is very volatile and therefore the central bank will be watchful of the ongoing situation and all actions will depend on how things pan out in the coming months.

The central bank on Friday slashed economic growth projection to 7.2 per cent for the current fiscal from 7.8 per cent estimated earlier amid volatile crude oil prices and supply chain disruptions due to the ongoing Russia-Ukraine war.

RBI however revised upwards its retail inflation forecast to 5.7 per cent for the current financial year 2022-23, compared with the 4.5 per cent projected earlier.

However RBI asserted that it will use all available tools to defend the Indian economy.

After referring to the pandemic situation and efforts taken by the central bank, Mr Das said, "now two years later, as we were emerging out of the pandemic situation, the global economy has seen tectonic shifts beginning 24th February, with the commencement of the war in Europe, followed by sanctions and escalating geopolitical tensions."

"Once again, we in the RBI stand resolute and in readiness to defend the economy and navigate out of the current storm," he added.