The Reserve Bank of India’s Monetary Policy Committee (MPC) on Friday that it expects India’s GDP growth for FY24 to come in at 6.5%, in line with its previous predictions.
“Risks are evenly balanced, with real GDP growth at 6.5% with Q2 at 6.5%, Q3 at 6% and Q4 at 5.7%,” Governor Shaktikanta Das said during his address post the meet.
India’s GDP grew 7.8% in the April-June quarter of FY 24, compared to 13.1% growth rate witnessed in Q1 of FY 2022-23.
In the August MPC, the GDP forecast for FY24 was retained at 6.5% as announced in June. Meanwhile, the inflation forecast was revised upwards to 5.4 per cent from 5.1 per cent earlier on the back of rising vegetable, cereal and pulse prices in August.
“Taking all these factors into consideration, real GDP growth for 2023-24 is projected at 6.5 per cent with Q1 at 8.0 per cent; Q2 at 6.5 per cent; Q3 at 6.0 per cent; and Q4 at 5.7 per cent, with risks broadly balanced. Real GDP growth for Q1:2024-25 is projected at 6.6 per cent,” the MPC’s outlook had said at the previous meet.
“Considering the developments in the economy and the external global environment, the YOY GDP growth for 2023-24 has been retained at 6.5 per cent, the same as in the June meeting of the MPC,” said MPC member Shashanka Bhide, in August.
The World Bank, earlier this week, kept India’s growth forecast unchanged at 6.3% for FY24, driven by investment, while sharply revising its inflation projection to 5.9% from 5.2%.
“The RBI’s policy of withdrawing accommodation and raising the policy interest rate over the last year has helped rein-in core inflation, which is expected to continue to decelerate gradually,” the World Bank said.
In its previous meeting, the rate-setting panel stressed the need to monitor the inflation situation closely given the risk of El Nino and uneven rainfall.
Global ratings and research agency Moody’s Investor Service, in September, raised India’s growth forecast to 6.7% in 2023 from 5.5% projected earlier.
