Reserve Bank of India Raises FY24 GDP Growth Projection to 7%

• ByStartupStory     |    December 8, 2023

The Reserve Bank of India (RBI) has revised its outlook for India’s real GDP growth in FY24, projecting a growth rate of 7%, up from the earlier estimate of 6.5%. Governor Shaktikanta Das highlighted the economy’s resilience, surpassing forecasts with robust growth in the second quarter of the fiscal year.

Das emphasized the country’s strong economic fundamentals, citing healthier balance sheets for banks and corporates, ongoing fiscal consolidation, manageable external balance, and substantial forex reserves as key factors contributing to India’s economic strength. He noted that these factors, combined with positive consumer and business sentiment, set the stage for sustained growth.

Looking forward, Das expressed the RBI’s commitment to further strengthening these fundamentals, emphasizing their role as a buffer against global uncertainties in today’s volatile world. The RBI maintained a positive stance, revising the real GDP growth for subsequent quarters while balancing the risks evenly.

In terms of inflation, the RBI retained the CPI inflation projection at 5.4% for 2023-24, cautioning about potential near-term challenges due to risks associated with food inflation. Das acknowledged the moderation in headline inflation from 7.4% in July to 4.9% in October, attributing it to successful disinflation through monetary policy measures.

He warned about possible inflation upticks in November and December, primarily linked to food inflation, urging vigilance to monitor any second-round effects. The RBI’s projections for CPI inflation in the upcoming quarters were outlined, maintaining a balanced view on the associated risks.

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