Five factors that could hamper RBI's optimistic GDP forecast for current fiscal and beyond
The RBI's other significant concern is the overheating in certain retail segments. Last month, the RBI increased the risk weights in unsecured loans and banks' funding to NBFCs.
- Dec 8, 2023,
- Updated Dec 8, 2023 12:13 PM IST
The upward revision in real GDP estimates by the Reserve Bank of India (RBI) from 6.5 per cent to 7.0 percent has brightened the prospect of higher growth in the economy. Though the revised GDP projection for 2023-24 is slightly lower than 7.2 percent in 2022-23, but it shows a huge upward momentum, which is a very positive sign. The Indian economy rebounded strongly from the Covid contraction of 5.8 percent in 2020-21 to a growth of 9.1 percent in 2021-22 and 7.2 percent in 2022-23.
At the start of the year, the RBI's real GDP projection was at 6.5 per cent in both 2023-24 and 2024-25. In September, the Chief Economic Advisor, V Anantha Nageswaran, has said that the Indian economy is poised to grow at an average of 6.5 percent annually between 2023 and 2030. Will the Indian economy maintain this higher momentum of 7 per cent plus in the coming years? There are actually quite a few risks that could impede the current momentum.
Finally, geopolitical tension is creating an environment of uncertainty for the financial system. The Russia-Ukraine conflict and the Israel-Hamas war have impacted supply chains and prices. Some impact is already visible in terms of currency depreciation and the strengthening of the dollar. The Governor mentioned that emerging market economies (EMEs) continue to face volatile capital flows.
Also read: GMR Airports Infra shares jump 13% to hit one-year high amid heavy volumes
Also read:Top stocks to watch on December 8, 2023: HUL, Focus Lighting, REC, IRCON, Wheels India and more
The upward revision in real GDP estimates by the Reserve Bank of India (RBI) from 6.5 per cent to 7.0 percent has brightened the prospect of higher growth in the economy. Though the revised GDP projection for 2023-24 is slightly lower than 7.2 percent in 2022-23, but it shows a huge upward momentum, which is a very positive sign. The Indian economy rebounded strongly from the Covid contraction of 5.8 percent in 2020-21 to a growth of 9.1 percent in 2021-22 and 7.2 percent in 2022-23.
At the start of the year, the RBI's real GDP projection was at 6.5 per cent in both 2023-24 and 2024-25. In September, the Chief Economic Advisor, V Anantha Nageswaran, has said that the Indian economy is poised to grow at an average of 6.5 percent annually between 2023 and 2030. Will the Indian economy maintain this higher momentum of 7 per cent plus in the coming years? There are actually quite a few risks that could impede the current momentum.
Finally, geopolitical tension is creating an environment of uncertainty for the financial system. The Russia-Ukraine conflict and the Israel-Hamas war have impacted supply chains and prices. Some impact is already visible in terms of currency depreciation and the strengthening of the dollar. The Governor mentioned that emerging market economies (EMEs) continue to face volatile capital flows.
Also read: GMR Airports Infra shares jump 13% to hit one-year high amid heavy volumes
Also read:Top stocks to watch on December 8, 2023: HUL, Focus Lighting, REC, IRCON, Wheels India and more