GDP forecast slashed to 5.5%
The RBI expects WPI inflation to remain range-bound in FY14. According to the guidance, this provides space, albeit limited for monetary policy to give greater emphasis to growth risks.
The RBIís industrial outlook survey also points to a softening of the rate of increase of output prices, suggesting that the pricing power of corporates has weakened. Fuel inflation moderated in December, reflecting the tempering of inflation of non-administered petroleum products and the range-bound exchange rate of the rupee.
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