RBI has raised its economic growth forecast for the current financial year to 7.2 percent.

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Mumbai:

The Reserve Bank of India (RBI) has raised the Gross Domestic Product (GDP) growth estimate for the current fiscal year 2024-25 to 7.2 percent from seven percent. The central bank has raised the growth rate estimate due to improvement in private consumption and strong demand in rural areas.

Presenting the bi-monthly monetary policy on Friday, RBI Governor Shaktikanta Das said the Indian economy is expected to grow at a rate of 8.2 per cent in 2023-24, as per estimates released by the National Statistical Office (NSO). He said, “Domestic economic activity has been strong so far in 2024-25… manufacturing activity has picked up on the back of rising domestic demand…” Das said various economic indicators show that the services sector is also picking up pace.

The RBI governor said the mainstay of aggregate demand is private consumption and is improving with steady discretionary spending in urban areas. Improvement in agricultural sector activity is witnessing a revival in rural demand and non-food credit is also increasing. He said the India Meteorological Department’s (IMD) forecast of an above-normal southwest monsoon would boost kharif production and increase reservoir levels.

The governor said, “Taking into account all these factors, real GDP growth for 2024-25 is estimated at 7.2 per cent… In the first quarter the growth rate is 7.3 per cent, in the second quarter it is 7.2 per cent, in the third quarter it is 7.3 per cent and in the fourth quarter it is 7.2 per cent would be… The risks are equally balanced…”

He said strong balance sheets of banks and companies, continued government emphasis on capital expenditure, high capacity utilization and business confidence are good signs for investment activities. Improving global trade prospects should boost external demand, the governor said.



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