Inflation affecting consumer spending and personal consumption; attaining price stability key to revival: RBI

It emphasised that stabilising inflation expectations is crucial for reviving consumer spending.

RBI’s monthly bulletin provides insights into domestic and global economic developments but does not necessarily reflect the views of the central bank itself.

"Once this is realised, the trade-offs and dilemmas confronting the conduct
of monetary policy fade away," the Bulletin said.

The bulletin acknowledges that high inflation and its impact on consumer expenditure are leading to a slowdown in corporate sales and hindering private investment in capacity creation.

It emphasises that achieving price stability is essential for sustainable and inclusive economic growth.

RBI Governor Shaktikanta Das said the central bank’s fight against inflation is far from over and the efforts will continue to bring inflation closer to the medium-term target. “Our fight against inflation is far from over and we have to continue with our efforts to bring down inflation closer to the target over the medium term,” Das said in the RBI April minutes.

Das added that the projected inflation in Q4 2023-24 at 5.2 percent wouldn’t be anywhere near the target.

"Therefore, at this juncture, we have to persevere with our focus on bringing about a durable moderation in inflation and at the same time give ourselves some time to monitor the impact of our past actions," he noted.