India inflation: Indicators show inflation may be peaking, RBI says

The Reserve Bank of India in its July bulletin has said that there are indications that inflation may be peaking, adding that the prognosis may be premature.

“As monetary policy works through into the economy and inflation falls back into the tolerance band by the fourth quarter of 2022-23, it will be the playing out of the baseline scenario,” the bulletin read.

“In an alternative simulation which incorporates the policy actions undertaken so far, the easing of inflation could be even sooner and faster. The key is the direction of change in inflation – not its level – in these extraordinary times.”

The RBI has asserted that the Indian economy is showing resilience in a global landscape marred by fears of recession and war.

“The recent revival of the monsoon, the pick-up in manufacturing and services, stabilisation of inflation pressures and strong buffers in the form of adequate international reserves, sufficient foodgrain stocks and a well-capitalised financial system together brighten the outlook and strengthen the conditions for a sustainable high growth trajectory in the medium-term.”