MUMBAI, June 7: The Reserve Bank of India (RBI) has revised its GDP forecast for the fiscal year 2024-25 to 7.2 per cent, up from the previous estimate of 7 per cent, while projecting Consumer Price Index (CPI) inflation at 4.5 per cent.
Announcing the policy rates and GDP projections on Friday, RBI Governor Shaktikanta Das stated, “The real GDP growth for the current financial year 2024-25 is projected at 7.2 per cent, with Q1 at 7.3 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent, and Q4 at 7.2 per cent. The risks are evenly balanced.”
Regarding inflation, Governor Das added, “Assuming a normal monsoon, CPI inflation for 2024-25 is projected at 4.5 per cent, with Q1 at 4.9 per cent, Q2 at 3.8 per cent, Q3 at 4.6 per cent, and Q4 at 4.5 per cent. The risks are evenly balanced. We have increased the GDP growth projection from 7 per cent to 7.2 per cent, while retaining the inflation projection at 4.5 per cent, as in the last MPC meeting.”
Das reiterated the Monetary Policy Committee’s (MPC) commitment to gradually withdrawing accommodation to ensure that inflation aligns with the targeted range while supporting economic growth.
“Monetary policy must continue to remain disinflationary and be resolute in its commitment to aligning inflation to the target of 4 per cent on a durable basis to sustain price stability and lay a strong foundation,” the RBI Governor remarked.
The decision to maintain the Repo Rate signals the RBI’s cautious approach towards balancing the objectives of controlling inflation and supporting economic recovery.
However, food inflation remains above the normal limit, posing a continuous challenge to the RBI’s deflationary efforts.
In its Monetary Policy Committee (MPC) meeting, the RBI opted to keep the policy repo rate unchanged at 6.5 per cent, as retail inflation continues to surpass its target of 4 per cent.
In a majority decision, with four out of six members in agreement, the MPC decided to maintain the Repo Rate.
Consequently, the standing deposit facility (SDF) rate remains at 6.25 per cent, while the marginal standing facility (MSF) rate and the bank rate remain at 6.75 per cent.
Governor Das, during his post-policy press conference, emphasized the importance of a balanced approach towards monetary policy.
