RBI has projected GDP growth at 17.2 per cent for the first quarter of the next financial year.
The Reserve Bank on Friday retained its GDP forecast for the current fiscal at 9.5 per cent and rated global semiconductor shortages, rising commodity prices, and potential global financial market volatility as downside risks to economic growth. marked as .
In his address after the three-day meeting of the rate-setting panel, RBI Governor Shaktikanta Das said aggregate demand improved in August-September, and this is reflected in high frequency indicators such as railway freight traffic; port cargo; cement production; electricity demand; e-way bill; GST and toll collection.
“Reduction in infections, along with improving consumer confidence, is supporting private consumption,” he said, and demand growth and the festive season should further boost urban demand in the second half of the fiscal year.
Also, as per the first advance estimates, continued resilience of the agriculture sector and record production of kharif food grains is expected to boost rural demand in 2021-22.
Das also said that with the improvement in the level of water bodies and early announcement of Minimum Support Price for Rabi crops, the possibilities of Rabi production have increased. Support to aggregate demand from government consumption is also gaining momentum.
The governor said significant support to aggregate demand also came from exports, which stood at over USD 30 billion for the seventh consecutive month in September 2021, reflecting strong global demand and policy support. Apart from this, the recovery in the services sector is also gaining momentum.
“The impact of higher input costs on profit margins, potential global financial and commodity markets volatility and a resurgence in COVID-19 infections, however, provide downside risks to the growth outlook,” Das said. Said while maintaining the growth forecast at 9.5 per cent. Percentage in 2021-22.
He said that the economic growth rate in the second quarter is estimated to be 7.9 percent; 6.8 per cent in the third quarter and 6.1 per cent in the January-March quarter of 2021-22.
The government’s official agency, the Office for National Statistics, said on August 31 that the real GDP growth for the first quarter of 2021-22 stood at 20.1 per cent.
RBI has projected GDP growth at 17.2 per cent for the first quarter of the next financial year.
In its policy review in June, the central bank had lowered the country’s growth forecast for the current fiscal to 9.5 per cent from the earlier estimated 10.5 per cent.
Das also said that improving government capital expenditure, along with favorable financial conditions, could accelerate the much-awaited virtuous investment cycle.
Referring to an RBI survey, he said the capacity utilization in the manufacturing sector, which declined sharply in the April-June period of 2021-22 under the second wave, is projected to recover in the second quarter and in the coming quarters. Further improvement is expected.
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