MUMBAI: The Reserve Bank on Thursday retained the gross domestic product (GDP) growth forecast for the current fiscal at 6.5 per cent on the back of supportive domestic demand conditions.
In April, the central bank revised 2023-24 GDP growth forecast to 6.5 per cent from its earlier forecast of 6.4 per cent.
Announcing the second bi-monthly policy for 2023-24, RBI Governor Shaktikanta Das said that domestic demand conditions remain supportive of growth and demand in rural areas is also on the way to revival.
India’s economy grew by 6.1 per cent in the fourth quarter of 2022-23, taking the annual growth rate to 7.2 per cent, as against the earlier estimate of 7 per cent.
Das said higher rabi crop production in 2022-23, an expected normal monsoon, and a sustained pick-up in services should support private consumption and overall economic activity in the current year.
The Monetary Policy Statement, 2023-24 said that the government’s thrust on capital expenditure, moderation in commodity prices and strong credit growth are expected to boost investment activity.
Weak external demand, geo-economic fragmentation and prolonged geo-political tensions, however, pose risks to the outlook.
“Taking all these factors into account, real GDP growth for 2023-24 at 6.5 per cent with Q1 at 8 per cent, Q2 at 6.5 per cent, Q3 at 6 per cent, and Q4 at 5.7 per cent, equally at risk Estimated with balanced, ”said the governor.
In the second quarter of 2023, Das said, the global economy is still maintaining the momentum achieved in the previous quarter despite high but moderate inflation, tight financial conditions, banking sector stress and prolonged geopolitical conflicts.