RBI raises inflation projection to 6.7% for current fiscal

New Delhi, Jun 8 (PTI) Reserve Bank of India (RBI) on Wednesday upped the inflation projection for the current fiscal to 6.7 percent from the 5.7 percent forecast in April.

RBI Governor Shaktikanta Das said the upside risk to inflation persists and the recent spike in tomato prices would fuel food inflation. Also, high global crude oil prices would add to the upside pressure on inflation.

The upward revision in inflation projection comes as domestic retail inflation has remained above RBI's comfort level of 6 percent for four months in a row, mainly due to the Russia-Ukraine war which has impacted the prices of commodities across the globe.

In the bi-monthly monetary policy, Das upped the inflation projection for the ongoing fiscal to 6.7 percent.

It projected inflation to be 7.5 in the June quarter (Q1) and 7.4 percent in the September quarter (Q2).

Inflation is expected to come down to 6.2 percent in the December quarter (Q3) and further reduce to 5.8 percent in the March quarter (Q4) of this fiscal.

Das said a normal south-west monsoon would boost Kharif sowing and agri output. However, the global geo-political situation remains fluid and the commodity market remains on the edge.

RBI, in its monetary policy in April, had projected inflation to be 5.7 percent in the current fiscal, with 6.3 percent in Q1; 5.8 percent in Q2; 5.4 percent in Q3, and 5.1 percent in Q4.

A rise in price across all items from fuel to vegetables and cooking oil pushed WPI or Wholesale Price Inflation to a record high of 15.08 percent in April and retail inflation to a nearly eight-year high of 7.79 percent.

RBI has the mandate to keep inflation at 4 percent with a bias of 2 percent on either side.