The performance of this year’s southwest monsoon will be crucial for both India’s farm sector and inflation trajectory, with any significant rainfall shortfall likely to affect agricultural output and food prices, RBI Governor Sanjay Malhotra said during the Monetary Policy Committee briefing on Friday.
Malhotra cautioned that the food inflation outlook remains uncertain despite headline consumer inflation staying below the central bank’s target. The RBI projected inflation at 5.1% for the rest of the financial year.
