RBI MPC: GDP growth for 2024-25 projected to be 7%, says Gov Shaktikanta Das

Reserve Bank of India (RBI) Governor Shaktikanta Das, during the Monetary Policy Committee meeting announcements on Friday, said that GDP growth for 2024-25 is projected to be 7 per cent. “The risks are evenly balanced,” said Governor Das. 

Real GDP for 2024-25 Q1 is projected at 7.1 per cent. The projection has been slightly altered from the 7.2 per cent the apex bank estimated in the February MPC announcements. Before that the RBI had projected a 6.7 per cent growth for Q1.

Meanwhile, real GDP growth for Q2 of 2024-25 is projected at 6.9 per cent, Q3 at 7 per cent, and Q4 at 7 per cent. The same was projected to be 6.8 per cent, 7 per cent and 6.9 per cent respectively in the previous MPC announcements in February. 

“Strengthening of rural demand, improving employment conditions and informal sector activity, moderating inflationary pressures, and sustained momentum in manufacturing and services sector should boost private consumption. As per our survey, consumer confidence one year ahead reached a new high. The prospect of investment activity remained bright owing to an upturn in private capex cycle becoming steadily broadbased, persisting and robust government capital expenditure, healthy balance sheets of banks and corporates, rising capacity utilisation and strengthening business optimism has reflected in our surveys,” said Governor Das. 

Das’ GDP projection comes after the manufacturing PMI touched a 16-year high in March at 59.1 and services PMI was one of the strongest in 13-and-half years at 61.2. Domestic economic activity continues to expand at an accelerated pace, supported by fixed investment and improving global environment, he said. 

Rural demand is catching up, and consumption is expected to support economic growth in 2024-25. Urban consumption remained buoyant too. There is resilience in cement production, and steel consumption and production have seen a strong growth. Outlook for agriculture and rural activity appears bright, with good rabi wheat crop and improved prospects of kharif crops, due to expected normal south-west monsoon, the governor added.

Governor Das stated that while improving global growth, trade prospects, India's rising integration in global supply chains, are expected to propel external demand for goods and services, the headwinds from protracted geopolitical tensions and increasing disruptions in trade routes could pose risks to the outlook.