RBI Projects Robust GDP Growth For FY25 Over Strong Economic Fundamentals

The Reserve Bank of India (RBI) is optimistic about India’s economic prospects, forecasting a real GDP growth of 7.2% for FY25.

This projection aligns with global trends, fueled by a surge in consumption and a vibrant investment climate in the country, according to RBI Governor Shaktikanta Das, who addressed the media on Wednesday following the conclusion of the Monetary Policy Committee (MPC) meeting.

Das outlined expectations for quarterly growth, estimating 7.3% for Q1, 7% for Q2, and 7.4% for both Q3 and Q4 of FY25.

He highlighted that investment’s contribution to GDP has reached its highest level since the fiscal year 2012-13, showcasing a significant rebound in economic activity.

Das stated, “Looking ahead, India’s growth story remains intact as its fundamental drivers – consumption and investment demand – are gaining momentum.”

He noted that the Gross Value Added (GVA) has expanded by 8%, outpacing GDP growth, thanks to resilient performance in both the industrial and services sectors.

Das emphasized that high-frequency economic indicators indicate a steady pace of domestic economic activity, with agriculture, manufacturing, and services remaining strong.

He further attributed the agricultural sector’s growth to favorable monsoon conditions and improved kharif sowing.

“Manufacturing is seeing an upturn due to increasing domestic demand, reduced input costs, and favorable government policies,” he explained, adding that government expenditure is on the rise, with a notable recovery in spending following a contraction in the first quarter.

Furthermore, Das indicated that household consumption is likely to accelerate in Q2 of FY25 as inflation pressures ease, alongside a notable revival in rural demand.

With these promising indicators, the RBI remains confident in India’s economic resilience and growth potential as it heads into FY25.

Also Read: RBI Governor Shaktikanta Das Projects FY25 Retail Inflation At 4.5% Amid Favorable Conditions