RBI Forecasts 7% GDP Growth for 2024-25, Predicts 4.5% Retail Inflation

In a recent announcement, RBI Governor Shaktikanta Das projected India’s GDP growth at 7 per cent for 2024-25, with inflation forecasted to remain at 4.5 per cent. The sustained momentum in growth has exceeded all projections, supported by fiscal consolidation and faster GDP growth. The second advance estimates placed real GDP growth at 7.6 per cent for 2023-24, marking the third successive year of 7 per cent or higher growth.

During the unveiling of the first monetary policy review for the current financial year, Das highlighted the need to focus on inflation and ensure its descent to the target of 4 per cent. The central bank anticipates inflation rates for different quarters of the fiscal year at 4.9 per cent, 3.8 per cent, 4.6 per cent, and 4.5 per cent, respectively. This marks a revision from the earlier projections made in the February policy, reflecting a positive outlook driven by robust growth prospects.

Das acknowledged the significant improvement in inflation rates, with headline inflation easing to 5.1 per cent in January and February from the peak of 5.7 per cent in December. The current inflation scenario provides the policy space to maintain focus on inflation, ensuring a steady descent in line with the target. As the economy continues to expand at an accelerated pace, supported by fixed investments and a favorable global environment, the RBI aims to balance growth with inflation control.

Reflecting on past challenges, Das humorously mentioned the ‘elephant in the room’ from two years ago when CPI inflation had peaked at 7.8% in April 2022. He compared the inflation scenario then to an elephant going out for a walk, indicating a more stable inflation environment currently. As the RBI charts its course ahead, the focus remains on managing inflation effectively to sustain economic growth and stability in the coming year.


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