RBI MPC announcements: Reserve Bank of India Governor Shaktikanta Das, in the Monetary Policy Committee (MPC) meeting announcements on Thursday projected real GDP growth rate for 2024-25 to be 7.2 per cent. He had, in the first MPC announcements after the Lok Sabha elections 2024 in June projected real GDP for 2024-25 to be 7.2 per cent.
RBI projected real GDP for 2024-25 Q1 at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent, and Q4 at 7.2 per cent. It is slightly altered from the previous projections of 7.3 per cent, 7.2 per cent, 7.3 per cent, and 7.2 per cent for the four consecutive quarters for this year. Das said that the Q1 projection has been slightly moderated from the June projections due to "updated information on certain high frequency indicators which show lower than anticipated corporate profitability, general government expenditure and core industries output".
“The risks are evenly balanced,” said Governor Das, furthermore projecting real GDP growth for Q1 2025-26 at 7.2 per cent.
“The healthy balance sheets of banks and corporates; thrust on capex by the government; and visible signs of pick up in private investment would drive fixed investment activity. Improving prospects of global trade are expected to aid external demand. The spillovers from protracted geopolitical tensions, volatility in international financial markets and geoeconomic fragmentation, however, pose risks on the downside,” said Das.
Global economic outlook exhibits steady but uneven expansion, said Das. Several central banks are moving towards policy pivots, he said. Many are moving towards rate cut scenarios, while some are in rate cut modes, said the Governor. Near-term growth looks positive for global growth, but challenges remain, he said. He also said there are many factors that pose challenges, including Artificial Intelligence.
Domestic economic growth is resilient, he said, adding that kharif output has been “very good”. Manufacturing activity continues to gain ground, he added. PMI remained elevated, services sector remained buoyant, he highlighted. Household consumption has posed a turnaround in rural demand, he said.
Improved agricultural activity has improved rural consumption, said Das, adding that urban consumption is looking up too.