Even as the CPI moderated to a three-month low of 5.10% in January, it remained above the RBI’s 4% target for straight 52 months.
The Reserve Bank of India is vigilant on the evolving price situation as a stable and low inflation will provide support for sustainable economic growth, governor Shaktikanta Das said on Thursday. Last mile of disinflation is “often the most difficult part of the journey,” Das said in the keynote address at the South East Asian Central Banks conference.
“The RBI projects the economy to grow by 7% during 2024-25, marking the fourth successive year of growth at or above 7%. Inflation has moderated from the highs of the summer of 2022. Recurring food price shocks and renewed flash points on the geo-political front, however, pose challenges to the ongoing disinflation process,” Das said.
Even as the CPI moderated to a three-month low of 5.10% in January, it remained above the RBI’s 4% target for straight 52 months. “We firmly recognise that stable and low inflation will provide the necessary bedrock for sustainable economic growth,” Das said.
Countries also need to devise cooperation strategies with regard to climate change. Smooth and orderly green transition is necessary to avoid loss of growth potential, and while investment needs for smooth green transition are large, the actual financial flows to green projects are highly skewed and are largely concentrated in advanced economies, the governor said. Accordingly, there is a need to enhance green capital flows to emerging market economies. At the same time, stakeholders must remain mindful of potential financial stability implications of green transition.
The linkage of the Unified Payments Interface (UPI) with the fast payment systems of a few other countries shows the potential of the UPI to become an international model for cross-border payments, Das said, adding that a digital public infrastructure can be used by countries to further the financial inclusion process through cost-effective methods.
Source:financialexpress.com