On Tuesday, Reserve Bank of India (RBI) Governor Shaktikanta Das stated that India’s economic trajectory remains robust, fueled by rising consumption and investment demand and emphasized that the nation is on track to achieve a real GDP growth rate of 7.2% for the fiscal year 2024-25 in the latest RBI monthly bulletin.
Das pointed out that private consumption, which serves as a cornerstone of overall demand, is likely to flourish due to favorable agricultural conditions and rising rural demand.
In the RBI’s monthly bulletin, RBI Governor noted, “Sustained buoyancy in services would also support urban demand. Government expenditure of the centre and the states is likely to pick up pace in line with the Budget Estimates.”
“Investment activity would benefit from consumer and business optimism, government’s continued thrust on capex and healthy balance sheets of banks and corporates,” he further asserted.
RBI Forecasts Quarter-by-Quarter GDP Growth For 2024-25
According to the RBI document, the GDP growth forecast for the upcoming fiscal year includes a quarter-by-quarter breakdown:
- 7.0% – Q2,
- 7.4% – Both Q3 and Q4, and
- A projected 7.3% for Q1 of fiscal year 2025-26
For 2024-25, analysts anticipate the Consumer Price Index (CPI) to average around 4.5% in terms of inflation.
The quarterly projections suggest a decrease to 4.1% in Q2, a rise to 4.8% in Q3, and a dip back to 4.2% in Q4. For Q1 of 2025-26, CPI inflation will likely stabilize at 4.3%.
Das further mentioned, “The CPI print for the month of September is expected to see a big jump due to unfavourable base effects and pick up in food price momentum, caused by the lingering effects of a shortfall in the production of onion, potato and chana dal (gram) in 2023-24, among other factors.”
The RBI Governor reiterated that domestic growth is maintaining its upward momentum, with both private consumption and investment expanding.
“Resilient growth gives us the space to focus on inflation so as to ensure its durable descent to the 4 per cent target. Keeping in view the prevailing inflation and growth conditions and the outlook, the MPC considered it appropriate to change the stance to ‘neutral’ and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth,” he added.
Additionally, the Reserve Bank will maintain flexibility and adaptability in its liquidity management operations.
“We will deploy an appropriate mix of instruments to modulate both frictional and durable liquidity so as to ensure that money market interest rates evolve in an orderly manner,” the RBI Governor stated.
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