What factors have prompted the monetary authorities to predict that the “improving inflation outlook” gives them comfort to continue to keep policy growth supportive?
(i) the inflation forecast, which averages to 4.5% over 2021-22.
(ii) a softening in vegetable prices on account of winter arrivals.
(iii) the RBI’s rate setting panel’s scepticism in normal monsoon, which is another uncertainty.
(iv) the improving prospects for food grains production.
In the passage, it is stated that “An expected softening in vegetable prices on account of winter arrivals, and the improving prospects for food grains production have prompted them to posit that the “improving inflation outlook” gives them comfort to continue to keep policy ‘growth supportive’.”
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