MPC Announcements: RBI Projects GDP Growth For FY24 At 6.5%

The Reserve Bank of India (RBI) has projected GDP growth for 2023-24 at 6.5%, announced governor Shaktikanta Das on Thursday.

Meanwhile, real GDP in Q1 is forecast to grow at 7.8%, Q2 at 6.2%, Q3 at 6.1% and Q4 at 5.9%.

In the earlier MPC meeting that took place in February 2023, RBI Governor projected 2023-24 growth at 6.4%, with Q1 growth at 7.8%, Q2 at 6.2%, Q3 at 6% and Q4 at 5.8%.

The RBI MPC has unanimously decided to keep the policy repo rate unchanged at 6.5%, announced Governor Shaktikanta Das.

Repo Rate is the rate at which the RBI lends money to commercial banks or financial institutions in India against government securities.

The Governor stated during the key announcements, "The higher rabi production has brightened the prospects for agriculture sector and rural demand. The steady growth in contact-intensive services should be positive for urban demand. The government's focus on capital expenditure, capacity utilisation above long-period average and moderating commodity prices should bolster manufacturing and investment activity. The drag from net external demand may continue due to increased global headwinds. The protracted geopolitical tensions and global financial market volatility pose downside risks to the outlook."

According to Anuj Sharma, Chief Operations Officer, IMGC, "The monetary policy committee met today for a bi-monthly policy review, and has decided to keep the Repo Rate unchanged. To help control inflation, the repo rate (the rate at which the central bank lends to commercial banks) had been raised six times in the last financial year (the current repo rate is at 6.50% vs 4% a year ago). Maintaining status quo on rates gives market stability and predictability, which can sustain home demand and grow the real-estate market. Increased rates have settled in now and a pause should help. When interest rates remain steady, potential homebuyers are more likely to be confident in their ability to acquire a loan and complete a purchase."

Anuj Puri, Chairman at ANAROCK Group said, "Much against general expectations, the RBI decided to keep the repo rates unchanged at 6.5% today. This is indeed good for the residential real estate market, which faces a tough road ahead amid massive layoffs by large corporates the world over. India is not decoupled from global economic dynamics and their invariable impact on the housing uptake here. The RBI's decision to keep the repo rates unchanged comes as a welcome respite to homebuyers."