The Reserve Bank of India (RBI) has emphasized the need for “continuous vigil” on price movements in its State of the Economy report. The central bank’s economic research department claimed that stabilizing inflation expectations can revive consumer spending, boost corporate revenues and profitability, which would be the best incentive for private capex. The RBI’s economic research team backed the monetary policy decision to keep the rate unchanged and withdraw the accommodative stance, citing latest national accounts data and corporate results showing that inflation is slowing down personal consumption expenditure.
