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Economy

RBI sees uneven disinflation, limited policy easing ahead

India’s disinflationary trend is expected to persist, providing limited scope for monetary policy easing, as noted in the RBI’s January 2025 bulletin. This may ease financial pressure on households and lenders dealing with rising credit card defaults.

News Arena Network - New Delhi - UPDATED: January 18, 2025, 03:00 PM - 2 min read

Disinflation can be expected to continue unevenly, RBI’s January 2025 bulletin said. (File Photo)


Disinflation is expected to continue unevenly, offering some limited space for monetary policy easing, according to the Reserve Bank of India’s (RBI) January 2025 bulletin. 

This shift could provide welcome relief to households and individuals facing financial stress, particularly those impacted by rising credit card defaults. Lenders are also likely to benefit, as the country experiences the highest levels of write-offs in 14 years. The easing of inflationary pressures, combined with technological advancements, could help boost incomes and stimulate aggregate demand, the RBI noted. 

However, the battle against inflation is entering a new phase, with emerging risks. The bulletin highlighted the "weaponisation of uncertainty" as a potential upward threat to inflation, adding complexity to the future path of interest rates.

On a global scale, the RBI also pointed out that slowing productivity growth, demographic pressures from an ageing population, and challenges related to the green transition continue to tilt the balance of risks for the medium-term global economy. A significant carryover from 2024 is the increasing divergence among major economies.

The US is expected to lose some momentum, while Europe and Japan are seeing weak to modest recoveries.


Emerging and developing economies, including India, are likely to experience more moderate growth, accompanied by a more gradual disinflation compared to advanced economies.

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