• UGI USER
  • Dec 21, 2023
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RBI OFFICIALS’ VIEW ON DISINFLATION AND INTEREST RATES

Why in the News?

  • Central bank officials, suggest that a global slowdown in inflation might result in forthcoming reductions in interest rates.
  • The anticipated disinflation, varying across geographies, is seen as a potential catalyst for interest rate cuts globally.
Source: TH

About Indian Economic Scenario:

  • Despite global uncertainties, Indian economic activity is expected to remain robust as India retained its position as the fastest-growing major economy in 2023.
  • Sustained economic growth in India is foreseen, supported by easing input costs and improved corporate profitability.
  • CPI inflation, which spiked to 5.6% in November due to food price fluctuations, is projected to ease, averaging 4.6% in the first three quarters of 2024-25.
  • The RBI’s economic activity index (EAI) indicates an anticipated GDP growth of 6.7% for Q3:2023-24, with sustained growth expected in H2:2023-24 and 2024-25.
What is Disinflation?

Disinflation refers to a slowdown in the rate of inflation, signifying a decrease in the general price level of goods and services, albeit at a rate higher than deflation. While prices continue to rise, the pace of inflation is reduced, often resulting in lower cost pressures within the economy.