Emphasising the need for sustained policy reforms from the government, Reserve Bank of India, RBI, on Monday said that monetary policy easing was possible only with fiscal consolidation and reforms provide support. In its report 'Macroeconomic and Monetary Developments: Third Quarter Review 2012-13',the bank raised concerns of a rising current account deficit and also acknowledged that inflation is still above its comfort level. It said, economic growth in the current fiscal likely to fall below estimate of 5.8 per cent. Growth remains below potential for the fifth successive quarter and Policy initiatives of the government are yet to show up fully or definitively in data. RBI has said that inflation may moderate below projection of 7.5%. However, 'suppressed inflation' will pose a significant risk to the inflation in 2013-14. Average WPI inflation is expected to moderate from 7.5% in 2012-13 to 7.0% in 2013-14.RBI feels that the quality of fiscal adjustment remains a concern, even as fiscal risks have reduced in 2012-13. Government is working towards achieving revised fiscal deficit target of 5.3% of GDP by restricting both plan and non-plan expenditure during the last quarter of the year, even as significant shortfall in tax revenue is likely.Widening current account deficit has emerged as a major constraint in easing monetary policy. The bank feels that the CAD/GDP ratio may exceed 4% of GDP for the second successive year in 2012-13.The central bank has blamed weak external demand alongside with structural bottlenecks for contraction in exports. In addition, continuing large imports of oil and gold has resulted in deterioration in India's trade balance. RBI said that better global liquidity and policy reforms have aided FII inflows. This has led to a turnaround in equity markets and revival of the Initial Public Offering market.