The Reserve Bank of India (RBI) on Thursday marginally revised upwards the economic growth projection for the current fiscal to 6.5 per cent, from its earlier estimate of 6.4 per cent. During the announcement of the first bi-monthly monetary policy (MPC) of FY24, Governor Shaktikanta Das said the GDP growth in the first quarter of 2023-24 is expected at 7.8 per cent.
The growth for second, third and fourth quarter of the current fiscal year has been projected at 6.2 per cent, 6.1 per cent, and 5.9 per cent, respectively.
The World Bank in its latest 'India Development Update' (IDU) has slashed the Gross Domestic Product (GDP) forecast to 6.3 per cent, against the earlier estimate of 6.6 per cent in 2023-24.
Asian Development Bank also expects India's economic growth to moderate to 6.4 per cent due to tight monetary conditions and elevated oil prices, as compared to 6.8 per cent expansion for the financial year ended March 2023.
In his speech, the governor said the economic activity remains resilient, economy expected to grow 7 per cent in FY23. The current policy rate is accommodative keeping in mind the current level of inflation.
Core inflation — which excluded volatile food and fuel inflation and a key concern for the RBI — has remained sticky above 6 per cent in recent months. Retail inflation in February stood at 6.44 per cent compared to 6.52 per cent in the previous month. MPC takes into account retail inflation numbers for setting the interest rates.
Das said the Indian rupee moved in orderly manner in FY23, RBI to remain watchful, the governor said, while adding that the bank will maintain agile approach for liquidity management and to manage government borrowing programme in non-disruptive manner.
The RBI is also keeping a close watch on turmoil in banking sector in developed countries as the global economy facing financial challenges in wake of recent bank failures.
According to his speech, the MPC lowered forecast of CPI inflation to 5.2 per cent from 5.3 per cent previously.