RBI retains FY23 GDP forecast at 7.2 per cent

The Reserve Bank of India on Wednesday retained its GDP growth forecast at 72 for the current fiscal but cautioned against negative spillovers of geopolitical tensions and a slowdown in the global economyAnnouncing the third monetary policy of 202223 RBI Governor Shaktikanta Das said the available information for April and May 2022 indicates that the recovery in domestic economic activity remains firm with growth impulses getting increasingly broadbasedManufacturing and services purchasing managers indices PMIs for May point towards further expansion of activityThis is also corroborated by the movements in railway freight and port traffic domestic air traffic GST collections steel consumption cement production and bank credit While urban demand is recovering rural demand is gradually improving Das saidLooking ahead real GDP is expected to broadly evolve on the lines of the April 2022 MPC resolution The forecast of normal southwest monsoon should boost kharif sowing and agricultural output This will support rural consumption The rebound in contactintensive services is expected to sustain urban consumption he saidNevertheless Das noted that the negative spillovers from geopolitical tensions elevated international commodity prices rising input costs tightening of global financial conditions and a slowdown in the world economy continue to weigh on the outlookTaking all these factors into consideration the real GDP growth for 202223 is retained at 72 per cent with Q1 at 162 per cent Q2 at 62 per cent Q3 at 41 per cent and Q4 at 40 per cent with risks broadly balanced the governor saidThe central bank earlier in April slashed the GDP growth projection for 202223 to 72 per cent from its earlier forecast of 78 per centOn Tuesday the World Bank cut Indias economic growth forecast for the current fiscal to 75 per cent as rising inflation supply chain disruptions and geopolitical tensions taper recoveryIt was the second time that the World Bank has revised its GDP growth forecast for India in the current fiscal 202223 April 2022 to March 2023 In April it trimmed the forecast from 87 per cent to 8 per cent and now it is projected at 75 per centIndias economy grew by 41 per cent in the JanuaryMarch quarter of 202122The governor further said experience teaches that preserving price stability is the best guarantee to ensure lasting growth and prosperityOur actions today will impart further credibility to our mediumterm inflation target which is the central tenet of a flexible inflation targeting framework Das addedHe further said Indias recovery is proceeding apace offering the RBI space for an orderly policy shiftDas stressed that amid the current difficult and challenging times the Indian economy has remained resilient supported by strong macroeconomic fundamentals and buffers The recovery has gained momentum despite the pandemic and the warHe also assured that similar to the RBIs resolute and timely actions to limit the economic damage emanating from the COVID19 pandemic the central bank will continue to be proactive and decisive in mitigating the fallout of the ongoing geopolitical crisis on the Indian economyThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever