During the MPC meet announcements on Friday, Governor Shaktikanta Das revised RBI's estimate of GDP growth in FY22 to 9.5 per cent. In the previous MPC meet, RBI had kept the projections unchanged at 10.5 per cent. The RBI expects GDP to grow at 18.5 per cent in first quarter, 7.9 per cent in second quarter, 7.2 per cent in third quarter, and 6.6 per cent in fourth quarter of 2021-22.
The apex bank's revision is in line with estimates by other banks, brokerages and rating agencies. SBI Research lowered its projections for GDP growth from 10.4 per cent to 7.9 per cent. Moody's expects growth at 9.3 per cent from the earlier 13.7 per cent. It also said that the second wave of coronavirus has raised risks to India's credit profile.
Barclays slashed India's growth estimates by 0.80 per cent to 9.2 per cent, while Credit Suisse sharply lowered its real GDP growth forecast to around 8.5-9 per cent, citing economic disruptions in the country due to the raging second wave that is likely to shave 100-150 bps.
Lowering of growth projections come after Ministry of Statistics & Programme Implementation (MoSPI) data on Monday stated that in FY21, India's GDP contracted 7.3 per cent. However, the economy had grown at 1.6 per cent in the fourth quarter of 2020-21. The contraction in FY21 GDP is worse in more than 40 years, the government data shows.
In order to tide over the impact of the second wave of COVID-19 the RBI maintained repo rate at 4 per cent and reverse repo rate at 3.5 per cent. It also stuck to its accommodative stance.
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