The Governor of the Reserve Bank of India (RBI), Shaktikanta Das, noted that the Indian economy and financial sector remain resilient in the face of global problems as the RBI maintained its GDP growth prediction for the fiscal year 2023–24 at 6.5%.
In-depth details on according to RBI, India’s GDP will grow by 6.5% between 2023 and 2024
The Monetary Policy Committee (MPC) of the RBI predicts that growth would vary throughout the year, peaking at 8% in the first quarter before declining to 5.7% in the third. According to these predictions, the fiscal year will begin strongly before gradually slowing down.
Mr. Das gave the economy of the country a thumbs up by declaring that “Indian economy and financial sector stand strong and resilient amidst unprecedented global headwinds.” The central bank’s decision to maintain the repo rate at 6.5%, which strengthens the stability of the country’s monetary policy, is a reflection of this optimism.
The MPC is concentrating its efforts on the withdrawal of policy stance accommodation, suggesting a potential tightening of monetary policy in response to concerns about inflation. Governor Das emphasised the need for “close and ongoing vigil on evolving inflation” in order to convey the commitment of the central bank to preserving price stability.
From a previous estimate of 5.2%, the RBI reduced its retail inflation outlook for FY’24 to 5.1%. The Governor emphasised that despite this minor decline, headline inflation remains over the RBI’s objective of 4% and is predicted to do so for the remainder of the year.
In addition, the Governor cautioned about the state of the world economy. Das emphasised the upcoming difficulties by stating that the geopolitical scenario will cause the pace of global economic activity to slow down.
The central bank must strike a difficult balance between managing the risks of inflation and economic growth, which is highlighted by the RBI’s forward guidance. It will continue to keep a careful eye on how the economy is changing and modify as necessary to keep the Indian financial system stable.
