Inflation challenges: Reserve Bank of India (RBI) Governor Shaktikanta Das highlighted the challenges posed by recurring food price shocks and geopolitical tensions in managing inflation during his keynote address at the 59th SEACEN Governors' Conference. He emphasised the importance of stable and low inflation as a foundation for sustainable economic growth.

Governor Das praised the government's successful navigation through various challenges, emerging as the fastest-growing large economy. He credited prudent monetary and fiscal policies for this success and projected the economy to grow by 7.0 per cent during 2024–25, marking the fourth consecutive year of growth at or above 7 per cent.

Inflation moderations 

While acknowledging that inflation has moderated from its 2022 highs, Das noted that retail inflation is nearing its 4 per cent target, with the January figure at 5.1 per cent. He cautioned that food price shocks and geopolitical issues could hinder the ongoing disinflation process.

Das emphasised the need for proactive central bank policies to ensure price and financial stability, particularly in light of uncertainties in the global economy. He suggested five possible policy choices for the future global economy.

The governor also highlighted the potential of digital public infrastructure, citing India's success with the Unified Payments Interface (UPI) as a model for international cross-border payments. He praised SEACEN as a valuable forum for central banks in the region to share insights and foster cooperation for progress and prosperity, emphasising the importance of cooperation based on comparative advantage and resource endowments.

(with PTI inputs)