Data-driven Malhotra seeks to improve RBI forecasting

NEW RESERVE BANK of India (RBI) governor Sanjay Malhotra has initiated a review of the central bank's inflation and growth forecasting tools to minimise projection errors, four sources said.

- SIDDHI NAYAK & SWATI BHAT

Malhotra, who took charge last month, is asking the RBI's internal teams to include new datasets, analysis and projections in their inflation and growth forecasts, sources aware of the central bank's thinking said.

None of the sources wished to be identified as they are not allowed to speak with the media. The RBI did not immediately respond to a Reuters' email seeking comment.

The review comes amid increased scrutiny on the central bank's growth and inflation estimates, which have been off the mark for much of the current fiscal, with growth on track to be much weaker than expected and inflation higher.