GDP Will Bounce Back Sharply: RBI Gov­er­nor

The Economic Times - - Markets: Beating Volatility - Press Trust of In­dia

New Delhi: Re­serve Bank of In­dia Gov­er­nor Ur­jit Pa­tel on Fri­day said In­dia’s eco­nomic growth will make a “sharp V” re­cov­ery fol­low­ing the re­call of old ₹ 500 and ₹ 1,000 notes.

Pa­tel also made a strong case for con­tin­u­ing with glob­al­i­sa­tion even in the face of a po­ten­tial shift to trade pro­tec­tion­ism un­der US Pres­i­dent Don­ald Trump as In­dia has ben­e­fited from open trade.

“Al­most ev­ery­one agrees that the im­pact is go­ing to be a sharp ‘V’, that we would have a down­grade of growth for a short pe­riod of ti- me,” he said in a TV in­ter­view. “How­ever, the re­mon­eti­sa­tion has hap­pened at a fast pace and that was part of the plan.” RBI last week low­ered eco­nomic growth for the cur­rent fis­cal to 6.9% from the pre­vi­ously pro­jected 7.1%, but saw it bounc­ing back in a big way to 7.4% in 2017-18.

He said the ben­e­fit of junk­ing 86% of cur­rency in cir­cu­la­tion will take time to fully play out and needs more work to en­sure they are last­ing.

“I think that it is im­por­tant that one grows a thick skin fast in this busi­ness and I think we have done that. We have gone about our work, we had un­der­taken ma­jor chal­lenges dur­ing these past few months and valid crit­i­cism is some­thing that we are open to and we take it in the spirit in which it is given and try to im­prove our­selves,” he said. Asked when In­dia could achieve 9% GDP growth, he said it is dif­fi­cult to pre­dict sus­tain­able growth rates. Higher growth rate is pos­si­ble if very fun­da­men­tal re­forms, es­pe­cially in fac­tors of pro­duc­tion like land and labour, are un­der­taken, the gov­er­nor said.

RBI Gov­er­nor Ur­jit Pa­tel

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