India, A Picture Of Growth And Stability With Economy To Grow At 7 Percent, Says RBI Governor
The Reserve Bank of India Governor Shaktikanta Das said that, in the next fiscal, the Indian economy is likely to grow 7 percent. He was speaking at the CII session, at the Annual Meeting of the World Economic Forum, held at Davos. The Governor said that India is a picture of growth and stability in the challenging global macroeconomic environment. He added that the Reserve Bank is confident of accomplishing its four percent target at the earliest as inflation was moderated steadily. The recent changes in the form of structural reforms which were ushered in by the government were given credit as, he said that these reforms have enhanced the prospects for the medium and long-term growth of the Indian economy.
“Chances of soft landing have improved and markets have reacted positively. However, geopolitical risks and climate risks remain matters of concern,” he said. He pointed that though growth is slow, inflation has been reaching down and that the recent data on the global economy is reassuring and further said that the expected real GDP growth for India this year was at 7.2 percent.
in his speech, he said, “with strong domestic demand, India remains the fastest growing major economy… We have emerged stronger out of the recent spate of global shocks.” The external balance of the country, could be well managed with the strong forex reserves of the country. He touched upon the RBI’s monetary policy action and rebalancing of liquidity, stating that it was working out well as it was clear from the substantial easing of the headline inflation which was high in the summer of 2022. In order to combat inflation, RBI had raised the repo rates by 250 basis points since May 2022 and had kept a pause on this until early last year.
On core inflation, he said that it has also “gradually and steadily moderated, while proactive supply-side interventions by the government have also played a key role in handling food price shocks.” The expected average CPI inflation for the following year has been set at 4.5 percent by the RBI, along with the expectation of Indian economy’s growth which has been pinned at seven percent for the year 2024-2025.
As per the RBI monetary policy, December 2023, for the fifth time, the RBI had left the repo rate without any changes and kept its focus on withdrawal of accommodation to make sure that inflation falls gradually to their target, and at the same time, kept giving support to growth.
