RBI Governor Das Foresees India’s Growth Reaching Over 7.5%

Das remarked, “I think India's potential growth today... is about seven-and-a-half-per-cent-plus.” The forum was held in partnership with Swiss bank UBS"

India has the potential to grow at a rate of at least 7.5 per cent, according to Reserve Bank of India Governor Shaktikanta Das. Speaking at the Bretton Woods Committee's annual Future of Finance Forum in Singapore, Das noted that this forecast slightly exceeds the Reserve Bank of India's own estimate of 7.2 per cent growth for the current fiscal year, FY25. 

Das remarked, “I think India's potential growth today... is about seven-and-a-half-per-cent-plus.” The forum was held in partnership with Swiss bank UBS.

“This year, we expect at the end of the year to record 7.2 per cent,” Das stated. During the April-June quarter, India saw a slower growth rate of 6.7 per cent year-on-year, which was attributed to reduced government spending related to the Lok Sabha elections. This figure was below the Reserve Bank of India’s earlier projection of 7.1 per cent.

Das noted that growth forecasts come with balanced risks, supported by robust macroeconomic fundamentals. He highlighted private consumption and investment as crucial drivers of this stability. “Inflation has moderated from its peak of 7.8 per cent in April 2022 into the tolerance band of around the target of 4 per cent, but we still have a distance to cover and cannot afford to look the other way,” he said.

The Reserve Bank of India has projected that inflation will decrease to 4.5 per cent for the current financial year. Looking ahead to the next financial year (FY26), the Bank estimates that the average inflation rate will ease to 4.1 per cent, provided that there are no significant disruptions from external sources or policy changes and that the monsoon season proceeds normally.

Das pointed out that while service exports have increased, merchandise export growth has fallen short of expectations due to weaker external demand. He also highlighted the progress made in fiscal consolidation, the reduction in public debt, and the improving performance of corporations as key factors contributing to a balanced and optimistic growth forecast.