The first preliminary estimate released by the National Statistics Office (NSO) earlier this month showed that the country’s economy is expected to grow by 7.3% in the current financial year.
According to an article published in the January monthly bulletin of the RBI, in the financial year 2024-25, the focus should be on maintaining the growth momentum by ensuring real GDP growth of at least 7%.
For the current financial year ending March 31, 2024, the RBI forecasts real GDP growth of 7%. The first preliminary estimate released by the National Statistics Office (NSO) earlier this month showed that the country’s economy is expected to grow by 7.3% in the current financial year.
RBI Governor Shaktikanta Das in Davos on Wednesday said India’s GDP growth will reach 7% in 2024-25. “In India, potential yields are improving, with actual yields higher, although the gap is moderate. In 2024-25, the aim is to maintain this momentum by ensuring real GDP growth of at least 7% in an environment of macroeconomic stability,” the RBI paper said. Therefore, inflation must be appropriate and stick to the target in the second quarter of this year as expected, he said.
The government has directed the RBI to maintain the CPI between 2 and 6%. Headline inflation, measured by annual changes in the all-India Consumer Price Index (CPI), increased slightly to 5.7% in December 2023, from 5.7% in December 2023 0.6% in November. For the financial year 2024-25 (FY24), the RBI expects the CPI to be 5.4%. CPI inflation in the first quarter of fiscal 2025 is forecast at 5.2%, in the second quarter at 4% and in the third quarter at 4.7%.
In his speech at Davos, Das said CPI inflation is expected to average around 4.5% in the financial year 2024-25.
The latest Financial Stability Report (FSR) released by the RBI last month said that the gross non-performing assets ratio (GNPA) of banks fell to a multi-year low of 3.2 per cent and the total non-performing assets (NNPA) to 0.8% by September 2023.
The benefits from the ongoing transformational technological change must be harnessed for inclusive and participatory growth in a healthy and risk-free environment, the article said. “Above all, the legitimate driving force for investment comes from public investment that must be linked and even led by the business sector, complemented by foreign direct investment,” he said.
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