Minutes Show Risks on Growth/Inflation as Broadly Balanced

RBI Minutes from their last unchanged rate decision:

• Spike in vegetable prices, led by tomatoes, would exert sizeable upside pressures on the near-term headline inflation trajectory. This jump is, however, likely to correct with fresh market arrivals.
• CPI inflation projected at 5.4% for 2023-24, with Q2 at 6.2%, Q3 at 5.7% and Q4 at 5.2%, with risks evenly balanced.
• Real GDP growth for 2023-24 is projected at 6.5% with Q1 at 8.0%; Q2 at 6.5%; Q3 at 6.0%; and Q4 at 5.7%, with risks broadly balanced.
• Bank remains prepared to undertake policy responses, should the situation so warrant. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth. Varma expressed reservations on this part of the resolution.