RBI to undertake study after May to assess India’s potential growth

RBI Governor Shaktikanta Das

The Reserve Bank of India (RBI) will undertake a study to assess India’s potential growth and real growth rate after the estimate of national income for 2023-24 is released at the end of May, RBI Governor Shaktikanta Das said on Friday.

“We will undertake a study after the final GDP numbers for the year 2023-24 are released at the end of May. We will undertake a state study to assess the potential growth and the real growth rate and maybe thereafter we can sort of provide some additional information,” Das said at a press briefing post the monetary policy.

The provisional estimates of national income for 2023-24 will be released on May 31. “When the average growth over a three year period is 8 percent. Naturally, our potential growth also appears to have grown and gone up. So, therefore, the potential growth and the real rate have to be seen in that context,” Das said.

Going by the National Statistical Office (NSO) forecast of 7.6 percent growth for the year 2023-24, the average for the three years 2021-22, 2022-23 and 2023-24 will work out at about 8 percent.

The monetary policy committee kept the estimates of GDP growth for the year 2024-25 unchanged at 7 percent. FY25 will be the fourth consecutive year of 7 percent and above growth.

The real GDP growth for the fiscal is projected at 7 percent.

The first quarter growth is estimated at 7.1 percent, Q2 at 6.9 percent and both Q3 and Q4 at 7 percent each. The risks are evenly balanced, Das said, while sharing the outcome of the MPC meeting in the morning.

India's economy surprised with a spurt in GDP growth at 8.4 percent in October-December, beating all estimates.

Moderating inflationary pressures and sustained momentum in the manufacturing and services sector should boost private consumption. The outlook for agriculture and rural activity appears right with good wage growth and improved prospects of crops due to expected normal southwest monsoon. With rural demand catching up, consumption is expected to support economic growth in 2024-25, Das said.