RBI Projects 2022-23 GDP Growth At 6.5%, CPI Inflation At 5.1%

The Reserve Bank of India (RBI) in its Monetary Policy today projected the real GDP growth for 2023-24 at 6.5% with Q1 at 8%, Q2 at 6.5%, Q3 at 6.%, and Q4 at 5.7%, with risks evenly balanced.

"The higher rabi crop production in 2022-23, the expected normal monsoon, and the sustained buoyancy in services should support private consumption and overall economic activity in the current year. The government's thrust on capital expenditure, moderation in commodity prices and robust credit growth are expected to nurture investment activity," the RBI said in its monetary policy statement.

On the inflation front, the RBI expects the headline inflation trajectory to be shaped by food price dynamics. "Wheat prices could see some correction on robust mandi arrivals and procurement. Milk prices, on the other hand, are likely to remain under pressure due to supply shortfalls and high fodder costs," the central bank stated.

For FY 2023-24, the country's central bank has projected inflation at 5.1%. "The forecast of a normal south-west monsoon by the India Meteorological Department (IMD) augurs well for kharif crops; however, the spatial and temporal distribution of the monsoon would need to be closely monitored to assess the prospects for agricultural production.

Crude oil prices have eased but the outlook remains uncertain. According to the early results from the Reserve Bank's surveys, manufacturing, services and infrastructure firms polled expect input costs and output prices to harden. A clearer picture will emerge when the final survey results are available. Taking into account these factors and assuming a normal monsoon, CPI inflation is projected at 5.1 per cent for 2023-24, with Q1 at 4.6 per cent, Q2 at 5.2 per cent, Q3 at 5.4 per cent and Q4 at 5.2 per cent," the RBI has stated.