RBI cuts GDP growth forecast for current fiscal to 9.5%

RBI Governor Shaktikanta Das stated the economy is prone to grow at the rate of 18.5 per cent in the first quarter, 7.9 per cent in the second quarter, 7.2 per cent in the third quarter and 6.6 per cent in the fourth quarter.

The RBI had earlier forecasted 10.5 per cent GDP growth for FY22. For Q1, RBI had expected growth at 26.2 per cent, for Q2 at 8.3 per cent, for Q3 at 5.Four per cent and for Q4 at 6.2 per cent.

“However the sequential decline of the indicators of rural demand in April, rural demand is expected to remain strong as a forecast of a normal monsoon bodes well for sustaining its buoyancy going forward. The increased spread of COVID-19 infections in rural areas, however, poses downside risks. Taking all these factors into consideration, real GDP growth is now projected at 9.5 per cent in 2021-22 consisting of 18.5 per cent in Q1; 7.9 per cent in Q2; 7.2 per cent in Q3; and 6.6 per cent in Q4 of 2021-22,” RBI Governor stated.

The Reserve Bank of India (RBI) has kept rates of interest unchanged, continues with an accommodative stance to revive and sustain growth on a sustainable basis.” The Marginal Standing Facility (MSF) price and bank rates stay unchanged at 4.25 per cent. Reverse repo rate also remains unchanged,” stated RBI Governor Shaktikanta Das.