Mumbai, April 6: Reserve Bank of India (RBI) Governor Shaktikanta Das announced on Thursday that the RBI has forecast a 6.5% real GDP growth rate for India in 2023–2024 following the RBI’s Monetary Policy Committee’s three days of deliberations.
The governor stated during his address that RBI forecasted GDP growth at 7.8% in the first quarter (Q1) of FY24, 6.2% in the second quarter (Q2), 6.1% in the third quarter (Q3), and 5.9% in the fourth quarter (Q4).
RBI’s governor said, “Our job is not yet finished and the war against inflation has to continue until we see a durable decline in inflation closer to the target.”
Following three days of discussion, the Monetary Policy Committee of the RBI decided to maintain the repo rate at 6.5 percent on Thursday. The majority of experts anticipated that the RBI will increase the benchmark interest rate by 25 basis points. The governor also emphasised the real GDP and inflation projections for FY24 during his speech.
The governor predicts that inflation will reduce to 5.2% in 2023–2024, with the consumer price index (CPI) at 5.1% in Q1 and 5.4% in each of the next four quarters: Q2, Q3, Q3, and Q4.
Shaktikanta Das said, “Our monetary policy in the recent period has aimed for a non-disruptive normalisation from the pandemic era stimulus measures. Even as monetary policy moved decisively to the withdrawal of accommodation, financial conditions evolved in line with the productive requirements of the economy.”
“Inflation has softened from its elevated levels a year ago; however, it still remains above the upper tolerance band,” he added.
Considering the rigidity of the core or underlying inflation pressures, Shaktikanta Das claims that predictions for 2023–24 hint at a softening in inflation, however, the disinflation is likely to be gradual and lengthy.
The governor stated that the RBI is still keeping an eye on how the outlook is changing and how our recent actions have affected the larger real economy.
He said, “While we have kept the policy rate unchanged, it is important to bear in mind that this decision was taken on the basis of our assessment of the macroeconomic and financial conditions with reference to the information available up to today.”
“We are confident that we are on the right track to bring down inflation to the target rate over the medium term,” he added.