Gradual easing: RBI cites risk of rise in food prices

The RBI’s State of the Economy report warns that the long-term visibility of the 4% inflation goal does not imply scope for gradual easing as short-term risks of spikes in food prices need to be considered. The report predicts a decline in inflation to 4.6% in the first three-quarters of FY25, supported by lower input costs and increased corporate profits. It underscores inflation as a key risk to growth. The report also addresses the scepticism surrounding the GDP growth of 7.7% in the first half of the fiscal year.