RBI Lowers GDP Forecast To 7% From 7.2%

The RBI Governor Shaktikanta Das today announced a 50 bps repo rate hike to 5.90%. It is the fourth straight rate hike by the central bank to control the climbing inflation rate. Additionally, the RBI has today lowered FY23 gross domestic product (GDP) growth forecast to 7% from 7.2%.

India's Gross domestic product or GDP is a monetary measure of the market value of all the final goods and services produced in a specific period in the country.

The RBI GDP projections come against the backdrop of many others lowering the GDP. Moody's at the start of the month lowered its gross domestic product (GDP) growth forecast for India to 7.7% for the calendar year 2022 (CY22) due to rising interest rates, uneven monsoon, and slowing global growth. The global credit rating agency also lowered India's GDP forecast for CY23 to 5.2% from 5.4%.

"S&P Global Ratings on the other hand projected India's economy to grow by 7.3% by end of the FY23 fiscal. High oil prices, a slowdown in global demand for the country's exports, and multi-year high inflation are seen as the causes of downward pressure on economic growth," it noted.