Inflation to be above 5%, GDP growth forecast 6.5% for 2023-24: RBI

Following the conclusion of its three-day Monetary Policy Committee (MPC) meeting, Reserve Bank of India (RBI) Governor Shaktikanta Das has announced the decision on the key policy rates. Notably, the inflation forecast for the financial year 2023-24 is lowered to 5.1% from an earlier estimate of 5.2%.

“A durable disinflation in core inflation would be critical for a sustained alignment of the headline inflation with the target. CPI inflation forecast for 2023-24 cut to 5.1% from 5.2%,” Governor Das said.

On the other hand, RBI has decided to keep the policy rates unchanged at 6.5% for the second consecutive term. The decision by RBI has been taken to keep the moderated inflation rates in recent months.

Apart from this, the RBI Governor also announced that headline inflation remains above the RBI’s target of 4% and is expected to stay the same for the current financial year.

GDP growth will stand at 6.5%

The Governor of the Reserve Bank of India (RBI), Shaktikanta Das, noted that the Indian economy and financial sector remain resilient in the face of global problems as the RBI maintained its GDP growth prediction for the fiscal year 2023–24 at 6.5%.

The Monetary Policy Committee (MPC) of the RBI predicts that growth would vary throughout the year, peaking at 8% in the first quarter before declining to 5.7% in the third. According to these predictions, the fiscal year will begin strongly before gradually slowing down.

In a vote of confidence for the nation’s economy, Mr Das said, “Indian economy and financial sector stand strong and resilient amidst unprecedented global headwinds.” This optimism is reflected in the central bank’s decision to keep the repo rate unchanged at 6.5%, reinforcing the stability of the nation’s monetary policy.

The RBI Governor also cautioned the global economic activity. While highlighting the potential challenges, Das said, “The pace of global economic activity to decelerate due to the geopolitical situation.

The Governor also offered a cautious note on global economic activity. “The pace of global economic activity to decelerate due to the geopolitical situation,” said Das, highlighting the potential challenges that lay ahead.