RBI believes Indian economy is well-placed to step up growth trajectory

NEW DELHI : The Reserve Bank of India, on Thursday, said India’s GDP growth is robust on the back of solid investment demand aided by healthy balance sheets of banks and corporates, the government’s focus on capital expenditure and prudent monetary, regulatory and fiscal policies.

In its annual report for 2023-24, the central bank said Indian economy is navigating the drag from adverse global macroeconomic and financial conditions.

According to the report, the Indian Economy is well-placed to step up growth trajectory over the next decade in an environment of macroeconomic and financial stability.

“Consumption demand, especially in rural areas, to spur as headline inflation eases towards targeted level. Indian economy well-placed to step up growth trajectory over next decade in environment of macroeconomic and financial stability,” the report said.

The RBI, however, observed that geopolitical tensions, geoeconomic fragmentation, global financial market volatility, international commodity price movements and erratic weather developments pose downside risks to the growth outlook and upside risks to the inflation outlook.

The RBI also warned that the Indian economy would have to navigate challenges posed by rapid adoption of AI/ML (artificial intelligence/machine learning) technologies as well as recurrent climate shocks.

RBI sees real GDP growth at 7 pc

The economy is likely to grow at 7 per cent in the current fiscal year starting April, the RBI said.

The Indian economy, it said, expanded at a robust pace in 2023-24 (April 2023 to March 2024 financial year), with real GDP growth accelerating to 7.6 per cent from 7.0 per cent in the previous year the third successive year of 7 per cent or above growth.

“The real GDP growth for 2024-25 is projected at 7.0 per cent with risks evenly balanced,” it said.

The economy, the central bank said, showed resilience in FY24 despite persistent headwinds.