No surprise if India’s GDP surpasses 7% mark this year, says RBI Governor

Mangalore Today News Network

New Delhi, May 24, 2023: Reserve Bank of India (RBI) Governor Shaktikanta Das said it would not be surprising if India’s GDP surpasses the 7 per cent mark this year as he asserted confidence in the country’s economic growth. The Governor’s remarks came during the annual session of the Confederation of Indian Industry (CII) in Mumbai.

 

Shaktikanta Das said the RBI has projected a growth rate of 6.5 per cent for the fiscal year 2023-2024. "While the International Monetary Fund (IMF) has provided a lower projection, the RBI draws confidence from the agriculture and service exports sectors, which have shown promising performance," Das said, highlighting a significant improvement in capital expenditure (CAPEX) and infrastructure spending.

The Governor emphasised that decisions related to monetary policy are not solely in his hands and depend on the prevailing situation on the ground. "We have to consider the current circumstances and inflation levels while formulating policy measures. The RBI’s approach is not a pause but a pivot," he said, underlining the importance of adapting to the evolving economic conditions.

Addressing global economic challenges, the Governor mentioned that global growth is being supported by the easing of supply chain disruptions, normalization of energy and food markets, and the reopening of Chinese markets. He also acknowledged the impact of geopolitical factors on the global economy.

"The coexistence of high inflation and banking stress has complicated the responses of central banks worldwide. The Indian banking system nevertheless remains resilient and stable," the Governor said.

"While inflation has moderated, there is no room for complacency. We’ll have to see how El Nino factor plays out," he said, as he further highlighted the unexpected impact of the Ukraine conflict on food grains, crude oil, and other commodities. He acknowledged that last year, the Central Bank had faced criticism for a surprise meeting but reiterated that the RBI’s approach has been prudent, proactive, and timely.

The Governor also emphasized the RBI’s focused approach towards maintaining stability in the exchange rate and the rupee to instill confidence. He pointed out the need to build foreign exchange reserves, especially during the COVID-19 pandemic, when there was a surge of outflows that required intervention.

Courtesy: India Today