RBI (Reserve Bank of India) has cut its forecast of real GDP growth at 9.5 per cent in the current financial year (2021-2022). RBI Governor Shaktikanta Das said the economy is likely 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.
RBI Cuts Economic Growth Forecast
The Reserve Bank of India 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 5.4 per cent and for Q4 at 6.2 per cent. “Notwithstanding 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 said.
The Reserve Bank of India has kept interest rates unchanged, continues with an accommodative stance to revive and sustain growth on a sustainable basis.” The Marginal Standing Facility (MSF) rate and bank rates remain unchanged at 4.25 per cent. Reverse repo rate also remains unchanged,” said RBI Governor Shaktikanta Das.