Commodity prices, however, have softened and recession risks in advanced economies (AEs) are rising, stated RBI.

RBI further stated that high and protracted uncertainty surrounding the course of geopolitical conditions weighs heavily on the inflation outlook. 

RBI stated that taking into account these factors and an average crude oil price (Indian basket) of US$ 100 per barrel, Inflation is projected at 6.7 per cent in 2022-23, with Q2 at 7.1 per cent; Q3 at 6.5 per cent; and Q4 at 5.8 per cent, and risks are evenly balanced.

RBI further stated that high and protracted uncertainty surrounding the course of geopolitical conditions weighs heavily on the inflation outlook. 

Commodity prices, however, have softened and recession risks in advanced economies (AEs) are rising. On the domestic front, the late recovery in sowing augurs well for kharif output. The prospects for the rabi crop are buffered by comfortable reservoir levels.

The risk of crop damage from excessive/unseasonal rains, however, remains. These factors have implications for the food price outlook. Elevated imported inflation pressures remain an upside risk for the future trajectory of inflation, amplified by the continuing appreciation of the US dollar.

The outlook for crude oil prices is highly uncertain and tethered to geopolitical developments, with attendant concerns relating to both supply and demand, stated RBI.