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RBI Maintains Repo Rate; Projects India’s FY24 GDP Growth At 6.5%

Updated: Oct 06, 2023 04:44:35pm

RBI Maintains Repo Rate; Projects India’s FY24 GDP Growth At 6.5%

Mumbai, Oct 6 (KNN) The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) on Friday decided to keep the repo rate unchanged at 6.50 per cent under the liquidity adjustment facility (LAF).

The central bank has projected India’s real gross domestic product (GDP) growth for fiscal 2023-24 (FY24) at 6.5 per cent.


The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.

Domestic demand conditions are expected to benefit from the sustained buoyancy in services, revival in rural demand, consumer and business optimism, the government’s thrust on capex, and healthy balance sheets of banks and corporates.

Headwinds from global factors like geopolitical tensions, volatile financial markets and energy prices, and climate shocks pose risks to the growth outlook.

Taking all these factors into consideration, the real GDP growth for the second quarter (Q2) FY24 is projected at 6.5 per cent, Q3 FY24 at 6.0 per cent, and Q4 FY24 at 5.7 per cent, with risks evenly balanced. Real GDP growth for Q1 fiscal 2024-25 is projected at 6.6 per cent, the RBI said in a statement.

CPI inflation is projected at 5.4 per cent for FY24, with Q2 FY24 at 6.4 per cent, Q3 FY24 at 5.6 per cent and Q4 FY24 at 5.2 per cent, with risks evenly balanced. CPI inflation for Q1 fiscal 2024-25 is projected at 5.2 per cent.

The real GDP posted a growth of 7.8 per cent year-on-year (y-o-y) in Q1 FY24 (April-June), underpinned by private consumption and investment demand. The index of industrial production rose by 5.7 per cent in July; core industries’ output expanded by 12.1 per cent in August.

On the demand front, urban consumption is buoyant while rural demand is showing signs of revival. Investment activity is benefitting from public sector capex. Merchandise exports and non-oil non-gold imports remained in contraction in August, although the pace of decline eased, the release added.  (KNN Bureau)


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