India's GDP Projected To Grow 6.5% In FY24, Domestic Economy Resilient: RBI

The Reserve Bank of India (RBI) has projected that India's Gross Domestic Product (GDP) is expected to grow by 6.5% in the fiscal year 2023-24, signaling a positive outlook for the country's economy.

The central bank's assessment, outlined in its annual report, highlights the resilience of the domestic economy despite ongoing challenges.

Domestic economic activity may have hurdles in the future due to an uninspiring global outlook, but solid domestic macroeconomic and financial circumstances are projected to pay returns.

"Risks to inflation have moderated with downward corrections in global commodity and food prices and easing of the pass-through from high input cost pressures of last year. The cumulative increase in policy repo rate by 250 bps last year would steer the disinflationary process, along with supply side measures to address transient demand-supply mismatch due to food and energy shocks," the RBI said in the report.

It stated that the March 2023 round of the Reserve Bank's consumer confidence survey showed that consumers believe the current situation to have improved due to optimism in the general economic condition and household income. Future expectations are likewise optimistic.

"Economic activity continued to exhibit resilience - real GDP growth for 2023-24 was projected at 6.4 per cent with Q1 at 7.8 per cent, Q2 at 6.2 per cent, Q3 at 6.0 per cent and Q4 at 5.8 per cent, and risks broadly balanced.", as per the RBI report.

It further stated that the realignment of global supply networks, the move to renewable energy, and continued technical breakthroughs present a favourable climate for increased investment activity and productivity growth. Corporate and bank balance sheets that are strong, together with good capacity utilisation, will help to maintain the momentum in private investment.

Aside from that, it noted, port cargo traffic and railway freight traffic movements indicate that industrial activity is going up as input cost pressures gradually ease.