• UGI USER
  • Dec 24, 2023
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MONETARY POLICY CONCERNS AMID ECONOMIC SHIFT

Why in the News?

  • Monetary Policy Committee (MPC) members express concerns on containing inflation and boosting growth.
Source: WBPSC

Key Strategies for Benign Outcome:

  • MPC members outlines two essential strategies for a benign outcome.
  • First, maintaining a restrictive monetary policy to guide inflation toward the 4% target.
  • Second, preventing excessive real interest rates as inflation drops below the upper tolerance band.
  • Emphasis on the vulnerability of inflation to food price spikes.

Inflation Outlook :

  • Inflation vulnerability to food price spikes, causing persistent pressures.
  • Households express wariness, expecting unchanged inflation in the short term but foreseeing a rise over the year.
  • Consumers exhibit increased pessimism about future inflation, emphasizing the need for a vigilant and restrictive monetary policy.