RBI Forecasts 7% Real GDP Growth For FY25
"The real GDP growth for 2024-25 is projected at 7.0 per cent with risks evenly balanced," it said. Despite persistent challenges, the economy exhibited resilience throughout the fiscal year 2023-24
The Reserve Bank of India (RBI), in its annual report published on Thursday, projected that the Indian economy is poised to grow at a rate of 7 per cent during the current fiscal year starting from April. The report also highlighted that the Indian economy exhibited strong growth momentum in the 2023-24 financial year (April 2023 to March 2024), with real GDP expanding by 7.6 per cent, up from 7.0 per cent in the preceding year, marking the third consecutive year of growth at 7 per cent or higher.
"The real GDP growth for 2024-25 is projected at 7.0 per cent with risks evenly balanced," it said. Despite persistent challenges, the economy exhibited resilience throughout the fiscal year 2023-24.
The RBI emphasised that India's GDP growth remains robust, primarily driven by strong investment demand. This growth is bolstered by the healthy financial positions of both banks and corporates, alongside the government's emphasis on capital expenditure and the implementation of prudent monetary, regulatory, and fiscal policies.
According to the Reserve Bank's Annual Report for 2023-24, the Indian economy is managing to navigate challenges stemming from an unfavourable global macroeconomic and financial landscape. However, the report also asserts that the Indian economy is positioned favourably to enhance its growth trajectory in the upcoming decade amidst a macroeconomic and financial stability backdrop.
"As headline inflation eases towards the target, it will spur consumption demand, especially in rural areas," it said.
Additionally, it highlighted that the external sector's resilience and the presence of buffers such as foreign exchange reserves will shield domestic economic activity from global repercussions. However, the report cautioned that geopolitical tensions, geoeconomic fragmentation, volatility in global financial markets, fluctuations in international commodity prices, and unpredictable weather patterns pose potential threats to growth prospects and could elevate inflationary pressures.
The RBI underscored the necessity for the Indian economy to address challenges arising from the swift integration of AI/ML (artificial intelligence/machine learning) technologies alongside recurrent climate-related disruptions.
The annual report constitutes a mandated disclosure by the RBI's central board of directors. It comprehensively outlines the Reserve Bank of India's operations and responsibilities from April 2023 to March 2024.
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