Third Quarter Review of Monetary Policy 2010-11
-Announced on the 25th January 2011 by Dr. D. Subbarao, Governor, Reserve Bank of India
There have been significant changes in the macroeconomic environment since the Second Quarter Review issued on November 2, 2010. Globally, the recovery in the advanced economies appears to be consolidating and expectations of growth during 2011, particularly in the US, are generally being revised upwards. However, inflationary tendencies are clearly visible. Though still subdued in the advanced economies, inflationary pressures in emerging market economies (EMEs), which were already strong, have intensified due to sharp increases in food, energy and commodity prices.
2. The Indian economy has reverted to its pre-crisis growth trajectory, with growth in the first half of 2010-11 estimated at 8.9 per cent. Recent data on agricultural output and service sector indicators suggest that the growth momentum continued in the third quarter. The robustness of growth is also reflected in corporate sales, tax revenues and bank credit, notwithstanding some moderation in the index of industrial production (IIP).
3. Inflation is clearly the dominant concern. Even as the rate itself remains uncomfortably high, the reversal in the direction of inflation is striking. After some moderation between August and November 2010, inflation rose again in December 2010 on the back of sharp increase in the prices of primary food articles and the recent spurt in global oil prices. Non-food manufacturing inflation has remained sticky, reflecting both buoyant demand conditions and rising costs.
4. Against this backdrop, this statement sets out the Reserve Bank’s assessment of the current macroeconomic situation and forward projections. It is organised in four sections-
Section I provides an overview of global and domestic macroeconomic developments
Section II sets out the outlook and projections for growth, inflation and monetary aggregates
Section III explains the stance of monetary policy
Section IV specifies the policy measures.
I. The State of the Economy ... Click Here
II. Outlook and Projections ... Click Here
III. The Policy Stance... Click Here
IV. Policy Measures... Click Here
Click Here For Press Statement by Dr. D. Subbarao, Governor on Third Quarter Review
RBI has released Macroeconomic and Monetary Developments: Third Quarter Review 2010-11 document to serve as a background to the Third Quarter Review of Monetary Policy 2010-11 .
Highlights of third Quarter Review of Monetary Policy 2010-11....Click Here
Mixed reactions from Banks, Economists, India Inc on RBI Third Quarter Review 2010-11 ....Click Here