India’s central bank retains 7% growth rate projection for 2024-25
Mumbai, India – The Reserve Bank of India (RBI) Montary Policy Committee meeting has estimated real growth rate for financial year 2024-25 at 7%.
RBI Governor Shaktikanata Das, while announcing the outcome of the MPC on Friday, said that growth in first quarter of financial year 2024-2025 (FY25) is projected at 7.1%, followed by 6.9% in second quarter and 7% each in both third and fourth quarters.
"Since the last policy, the growth inflation dynamics has played out favourably. Growth has continued its momentum surpassing all expectations. Headline inflation has eased to 5.1% during both January and February," Das said. He said that global economy has remained resilient with a stable outlook reflected in various high quality indicators.
"Credible consolidation plans particularly in major advanced economies focussing on growth advancing investments would be necessary to address this challenge...india presents a different picture on account of its fiscal consolidation and faster GDP growth," Das said.
The RBI Governor also said that the advance estimates for 2023-24 placed the real GDP growth at 7.6%, which is the third successive year of 7% or higher growth.
"Turning to domestic growth, domestic economic activity continues to expand at an accelerated pace, supported by fixed investment and an improving global environment," Das said.
"The second advance estimates placed the real GDP growth at 7.6% for 2023-24, the third successive year of 7% or higher growth," he added.
He further said that the outlook for agriculture and rural activity appears bright, with good rabi wheat crop and improved prospects of kharif crops, due to expected normal south-west monsoon.
"Strengthening of rural demand, improving employment conditions and informal sector activity, moderating inflationary pressures and sustained momentum in manufacturing and services sector should boost private consumption," he said.
He noted that improving global growth and trade prospects, along with India's rising integration in global supply chains, is expected to propel external demand for goods and services. He, however, added that the headwinds from protracted geopolitical tensions and increasing disruptions in trade routes pose risks in the overall outlook.