RBI's Growth Projection: Stability Amid Challenges

The Reserve Bank of India (RBI) has retained its growth projection for the current fiscal year at 7.2%, driven by robust consumption and investment. While the GDP estimate for Q2 was revised down to 7%, the projections for Q3 and Q4 were revised up to 7.4%. Key growth drivers include consumption, investment, and government spending.

The Reserve Bank of India has maintained its growth projection for the current fiscal year at 7.2%, attributing this to strong consumption and investment momentum. The central bank did, however, adjust its GDP estimate for the second quarter from 7.2% down to 7%. Projections for the third and fourth quarters rose to 7.4% as India continues to leverage consumption and investment demand.

RBI Governor Shaktikanta Das emphasized India's solid economic foundation, highlighting bright prospects for private consumption due to an improved agricultural outlook. Infrastructure spending by the government aligns with budget estimates and is anticipated to support growth along with private sector investment activity.

Despite a climate of consistent growth, the Governor cautioned against complacency, referencing risks like inflation pressures from geopolitical conflicts and commodity price hikes. A shift to a neutral monetary policy stance signals optimism, yet ongoing vigilance is advised.

(With inputs from agencies.)