The Reserve Bank of India (RBI) has revised its forecast for real GDP growth for the financial year 2024-25, projecting a 7.2% increase, up from the previous estimate of 7%. During a press briefing on June 7, Governor Shaktikanta Das outlined the anticipated quarterly growth rates: 7.3% in Q1, 7.2% in Q2, 7.3% in Q3, and 7.2% in Q4.
Consistent Growth Above 7% for the Fourth Year
If these projections hold true, FY25 will mark the fourth consecutive year of GDP growth exceeding 7%. Governor Das emphasized the resilience of domestic economic activity and noted the strength of India’s manufacturing Purchasing Managers’ Index (PMI), which currently leads globally.
Strengthening Private Consumption and Rural Demand
Das highlighted the recovery in private consumption and the boost in rural demand driven by robust farm activities. The favorable forecast by the India Meteorological Department is expected to enhance Kharif crop output, further supporting the rural economy.
CPI and Inflation Trends
The governor pointed out that while the Consumer Price Index (CPI) headline inflation has softened in March and April, food inflation remains elevated. This mixed inflation outlook underscores the need for continued vigilance in monetary policy.
Monetary Policy Stance and Repo Rate Decision
On June 7, the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5% for the eighth consecutive time, with a majority vote of 4:2. The RBI has opted to maintain its stance on withdrawing accommodation, reflecting a cautious approach amidst global uncertainties.
Future Prospects and Global Positioning
Governor Das expressed optimism about India’s sustained high growth prospects. He emphasized the importance of being future-ready to enhance India’s global positioning and navigate potential challenges arising from global economic crises.
In summary, the RBI’s revised GDP growth projection for FY25 underscores India’s economic resilience and robust growth trajectory. With a stable monetary policy and positive indicators from the manufacturing and rural sectors, India is well-positioned to maintain its high growth rate and strengthen its global economic standing.
Source – indiatimes