February 8, 2024
The February meeting of the MPC maintained the benchmark lending rates at 6.5% for the sixth consecutive time
The committee's unchanged stance focuses on gradually withdrawing accommodation to align inflation with the target while supporting economic growth
The Centre's First Advance Estimate forecasts a 7.3% growth for the Indian economy in FY24, marking the third straight year of growth at 7% or above
India's economy, despite global challenges and central bank rate hikes, remains resilient
Governor Shaktikanta Das of the Reserve Bank of India (RBI) announced that the rate-setting panel foresees the Indian economy growing at a rate of 7% in FY25. The Monetary Policy Committee (MPC) has provided quarterly growth forecasts for FY25, projecting 7.2%, 6.8%, 7%, and 6.9%, respectively. This follows the MPC’s December meeting, which predicted a 7% growth rate for the Indian economy in FY24, with specific GDP growth rates for each quarter.
During the February meeting, Das revealed that the MPC had maintained the benchmark lending rates at 6.5% for the sixth consecutive time, with an unchanged stance. The committee is focused on gradually withdrawing accommodation to align inflation with the target while supporting economic growth.
Furthermore, Das highlighted the Centre’s First Advance Estimate, which forecasts a 7.3% growth for the Indian economy in FY24. If achieved, this would mark the third consecutive year of India achieving a growth rate of 7% or above. In FY23, India’s economy grew 7.2%, retaining the status of the fastest-growing major economy in 2023.
India’s economy remains resilient despite global economic challenges and multiple central bank rate hikes since 2022. The growth is sustained by robust consumer and government spending, a thriving services sector, and increased manufacturing. Prime Minister Narendra Modi’s administration has bolstered infrastructure spending, and foreign companies are increasingly investing in India, particularly in technology manufacturing, as an alternative to China.
Source: Economic Times