RBI governor FY25 forecast: 7% growth, 4.5% inflation – Times of India

by The Technical Blogs

MUMBAI: RBI governor Shaktikanta Das said the Indian economy is expected to grow 7% in FY25, the next financial year, while inflation will likely average 4.5%. Das said that with strong domestic demand, India remains the fastest-growing major economy and is now the fifth-largest economy in the world. He was speaking at an event organised by CII in Davos, Switzerland.
“I am saying this based on strong momentum of economic activity seen in India. Consequently, growth would be 7% and above for four consecutive years starting from FY22,” said Das. He said that going forward, food prices would considerably influence inflation but the monetary policy would need to be ‘actively disinflationary’ to steer inflation towards the target rate of 4% on a durable basis.
The governor’s statement, which comes just weeks ahead of the meeting of the monetary policy committee in the first week of February, hints at continuing with the status quo on rates.
“We have emerged from the recent spate of shocks with stronger fundamentals – inflation is easing, bank and corporate balance sheets are stronger than before, fiscal consolidation is on course, and its quality has improved, and the external balances are eminently manageable with strong forex reserves,” said Das.
The governor said that the structural reforms undertaken by government over the last few years in the fields of taxation, banking, ease of doing business, manufacturing, inflation management, and digitalisation, coupled with a clear focus on physical and digital infrastructure, have boosted the medium and long-term growth potential of the economy.
“The external demand for India’s services is surging and diversifying rapidly from IT-related services to other professional services,” said Das. The governor said the Indian economy is now poised for a long haul of higher growth.

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