According to Aditi Nayar, Chief Economist at Icra, the Reserve Bank of India (RBI) is unlikely to implement monetary tightening in the near future despite inflationary pressures from rising fuel prices and uncertainties surrounding the monsoon season. Icra has revised its FY27 average consumer price inflation forecast to 5%, which exceeds the RBI's medium-term target. The Monetary Policy Committee (MPC) is expected to maintain its current stance through the next two policy reviews, with a potential rate hike only in December 2023 if inflation persists. Nayar noted that the RBI will closely monitor the second-round inflation effects, particularly how companies respond to increased input costs. Icra projects that higher oil prices could result in a significant fiscal burden, estimating a ₹1.1 trillion net fiscal slippage, leading to a fiscal deficit of 4.7% of GDP. The agency also highlighted the importance of monsoon developments and the potential impact of El Nino on agricultural output and consumer sentiment, which could further complicate economic conditions.