India's central bank chief Shaktikanta Das said that authorities are closely monitoring inflation on Thursday, adding that the price of vegetables is expected to surge in July and August.
"Headline inflation, after reaching a low of 4.3 percent in May 2023, rose in June and is expected to surge during July and August, led by vegetable prices," Das said.
Possible El Nino weather conditions along with global food prices need to be watched closely against the backdrop of a skewed southwest monsoon so far, said Das, adding that soon vegetable prices will drop.
Speaking about global inflation and India's situation, he said, "India's economy has made significant progress toward controlling inflation. India is uniquely placed to benefit from the ongoing transformational shift in the global economy."
The global economy faces the daunting challenges of inflation, geo-political uncertainty, and extreme weather conditions. However, India is expected to withstand external headwinds on the economic growth front, said the RBI chief.
The RBI governor added that domestic demand is keeping up and will likely retain its momentum, despite weak external demand.
The central bank's monetary policy committee (MPC) kept the repo rate unchanged since February 2023. Meanwhile, it has projected India's second quarter (Q2) retail inflation at 6.2 percent, Q3 at 5.7 percent, and Q4 at 5.2 percent in the current fiscal year.