RBI sharpens GDP growth forecast to 6.6% for FY’25
The Reserve Bank of India (RBI) has significantly revised the GDP growth projection for the current fiscal year to 6.6%, down from its earlier estimate of 7.2%. At the same time, the central bank raised the inflation forecast to 4.8%, citing a slowdown in economic activity and persistent food price pressures.
India’s GDP growth slumped to a seven-quarter low of 5.4% during the July-September period of FY 2024-25, well below the RBI’s earlier projection of 7%.
RBI Governor Shaktikanta Das acknowledged that the growth rate was much lower than anticipated but expressed confidence in a gradual recovery.
Agricultural growth, bolstered by a healthy kharif crop, higher reservoir levels, and improved rabi sowing, is expected to sustain the recovery. Das added that industrial activity, which faced challenges in the previous quarter, is likely to normalize.
On the inflation front, Das pointed out that it rose sharply in September and October due to an unexpected surge in food prices.
Additionally, the RBI’s surveys of manufacturing and services firms indicate a firming up of input costs and selling prices in the last quarter of FY 2024-25.
The announcements were made during the fifth bi-monthly Monetary Policy Committee meeting for the current fiscal year.
