RBI MPC projects GDP growth for 2023-24 at 6.4%, says Gov Shaktikanta Das

Reserve Bank of India Governor Shaktikanta Das, in the Monetary Policy Committee meeting announcements on Wednesday, said that GDP is expected to grow at 6.4 per cent for 2023-24. Q1 growth is pegged at 7.8 per cent, Q2 at 6.2 per cent, Q3 at 6 per cent and Q4 at 5.8 per cent. The risks are evenly balanced, said the Governor. 

This is in line with the Economic Survey 2023-24’s growth projection, pegged to grow between 6-6.8 per cent, with real GDP growth projected at 6.5 per cent. 

Das said that the expected higher rabi output has improved the prospects of agriculture and rural demand. “The sustained rebound in contact-intensive sectors should support urban consumption. Broad-based credit growth, improving capacity utilisation, government’s thrust on capital spending and infrastructure should bolster investment activity. According to our surveys, manufacturing, services and infrastructure sector firms are optimistic about the business outlook. On the other hand, protracted geopolitical tensions, tightening global financial conditions and slowing external demand may continue as downside risks to domestic output,” he said during the statement. 

He also stated that the available data for Q3 and Q4:2022-23 indicate that economic activity in India remains resilient. Urban consumption demand is up, driven by sustained recovery in discretionary spending, especially on services such as travel, tourism and hospitality. 

Governor Shaktikanta Das said that the global economic outlook does not look as grim as it did a few months ago. Growth prospects in major economies have improved, he said, adding that while inflation is decreasing, it is still well above the target in major economies. 

“Unprecedented events of the last three years have put to test monetary policy across the world. Emerging market economies are facing sharp tradeoffs between supporting economic activity and controlling inflation while preserving policy credibility,” said Governor Das.

The Governor, meanwhile, increased the repo rate by 25 bps to 6.5 per cent. He said that four MPC members voted in favour of the increase, versus two members. The central bank said that its policy stance remains focused on the withdrawal of accommodation.

Additionally, the RBI also projected retail inflation at 5.6 per cent in the fourth quarter of 2023-24.

Also read: RBI raises repo rate by 25 basis points to 6.5% from 6.25%