Reserve Bank of India Governor Shaktikanta Das said during the MPC announcements on Friday said that GDP projection for 2022-23 has been retained at 7.2 per cent. He said that Q1 has been projected with a growth of 16.2 per cent, Q2 6.2 per cent, Q3 4.1 per cent, and Q4 4 per cent with risk broadly balanced.
Real GDP growth projection for Q1 2023-24 has been projected at 6.7 per cent.
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The RBI stated that the outlook for growth and rural consumption is expected to benefit from brightening agricultural prospects. “The demand for contact-intensive services and the improvement in business and consumer sentiment should bolster discretionary spending and urban consumption. Investment activity is expected to get support from the government’s capex push, improving bank credit and rising capacity utilisation,” it said.
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Firms polled in RBI’s industrial outlook survey expect sequential expansion in production volumes and new orders on the second quarter of 2022-23. However, the outlook is impacted by risks from geopolitical tensions, upsurge in global financial market volatility and tightening of global financial conditions.
The Governor said that inflation is projected to remain above the tolerance level of 6 per cent in the first three quarters of 2022-23. “Given the elevated level of inflation and resilience in domestic economic activity, the MPC took the view that further calibrated monetary policy action is needed to contain inflationary pressures, pull back headline inflation within the tolerance band closer to the target, and keep inflation expectations anchored so as to ensure that growth is sustained,” it said while announcing an increase in repo rate by 50 bps to 5.40 per cent, and withdrawing accommodative stance.
Also read: RBI MPC: Repo rate increased by 50 bps to 5.40%; accommodative stance withdrawn
Also read: RBI MPC meet: Inflation projected at 6.7% for 2022-23; central bank withdraws accommodative stance