RBI Balance of payments data: Central bank planning monthly release, says Deputy Governor Poonam Gupta

BoP data is currently released for every quarter, with the current account balance (CAB) being the most keenly-watched figure. The CAB denotes the net of payments made and received by Indians for the trade of goods and services with the rest of the world and the flow of remittances, and other similar payments, in and out of the country. As per latest data, India’s current account deficit widened to $2.35 billion in April-June 2025 from a surplus of $13.48 billion in the previous quarter.

Errors in forecasting ‘common’

Speaking on the RBI’s inflation and growth predictions, Gupta said any forecasting exercise, by its very nature, has the risk of incurring errors and that such errors are a common feature around the world. Errors are generally larger when there are unpredictable shocks or events and when one is predicting far ahead into the future, she added.

In India, Gupta said, inflation forecasting is challenging given the high and outdated weight of food in the CPI basket and the volatile nature of food prices. She added that the RBI is committed to using the state-of-the-art models and approaches to improve its forecast accuracy continuously.

“Besides minimising the forecast errors, what is equally important is to ensure that there is no systematic bias in the forecasts. As far as the inflation forecasts used in the MPC (Monetary Policy Committee) resolution are concerned, they are unbiased,” she said. Gupta, as the deputy governor in charge of monetary policy, is a member of the RBI’s monetary policy committee.

Over the years, the RBI’s inflation forecasts have come under fire. Most recently, the central bank has had to make repeated downward projections to its CPI inflation projections as incoming data continuously came in lower than what it expected.

In February, the RBI had forecast average CPI inflation for FY26 at 4.2 per cent. This was lowered to 4 per cent in April, 3.7 per cent in June, 3.1 per cent in August, and 2.6 per cent in October. With CPI inflation falling to a record low of 0.25 per cent in October, economists think CPI inflation could average below 2 per cent in FY26, making it likely that the RBI will lower its forecast again in early December.

Speaking on the base year revision exercise of GDP, IIP, and CPI, which is currently underway, Gupta said the review is not merely a technical exercise, but of foundational importance for the wider community. The proposed new base year for the GDP and IIP is 2022-23, and for CPI the proposed base year is 2024.