RBI retains FY23 GDP growth forecast at 7.2%
reserve Bank of India (reserve Bank of India) on Wednesday kept its FY23 real economic growth forecast for the country unchanged at 7.2%, indicating that the risks are more or less evenly balanced since the April forecast.
It now projects real GDP growth in Q1 at 16.2%; Q2 at 6.2%; Q3 at 4.1%; And Q4 at 4%. The forecast appears to be in a decreasing favorable base effect with the passing quarter of this financial year. The central bank refrained from revising its GDP growth forecast or inflation forecast in May when it announced an out-of-cycle repo rate cut by 40 basis points.
Stating that economic activity is picking up, the central bank suggested that rural consumption would benefit from brightening the prospects of agriculture after forecast of a normal monsoon season. Similarly, the ongoing recovery in contact-intensive services is likely to drive growth in urban consumption. Investment could also be aided by improved capacity utilization, increased capital expenditure of the government and increased credit flow. Growth in both goods and services exports is expected to maintain good momentum.
“(However) the spread-over from prolonged geopolitical tensions (Ukraine war), rising commodity prices, continuing supply constraints and tightening of global financial conditions, still have an impact on the outlook,” RBI said. said in a day when it increased the repo rate by 50 basis points. To curb runaway inflation, which hit an eight-year high of 7.79% in April.