Monetary Policy: RBI Keeps GDP Growth Forecast At 7% For FY25; Cuts Q1 Outlook Ahead Of Election

The Reserve Bank of India (RBI) has stayed on its estimate of 7% for overall GDP growth for the financial year FY25. However, Governor Shaktikanta Das announced that they are cutting the Q1 GDP growth forecast by 1 bps to 7.1% from earlier 7.2% which comes ahead of the Lok Sabha Election 2024.

But after Q1, GDP growth is expected to improve. RBI has increased its GDP growth target so on.

For Q2, RBI expects GDP growth at 6.9% from an earlier forecast of 6.8%. For Q3 and Q4, RBI is predicting the economic growth to be at 7%. E

RBI had predicted Q3 GDP growth at 7% earlier, so that has been unchanged now. However, the Q4 GDP target is increased by 1 bps to 7% from the earlier 6.9%.

Indian economy continues to dominate world economies by remaining resilient and above 7%. Beating estimates, India's GDP grows to a whopping 8.4% in Q3FY24, while its full year growth rate stood at 7.4%. The econony has even performed better-than RBI's forecast of 7% in FY24. The latest GDP growth was driven by robust performance in manufacturing and construction sectors.

As per the NSO data, Real GDP or GDP at Constant (2011-12) Prices in the year 2023-24 is estimated to attain a level of ₹172.90 lakh crore, against the FRE of GDP for the year 2022-23 of ₹160.71 lakh crore. The growth rate of GDP during 2023-24 is estimated at 7.6 percent as compared to growth rate of 7.0 percent in 2022-23.