RBI maintains GDP growth forecast at 7% for FY25 | Business News

The Reserve Bank of India (RBI) has maintained its GDP growth projection at 7 per cent for the 2024-25 fiscal year, citing factors such as a normal monsoon, easing inflationary pressures, and continued growth in the manufacturing and services sectors. However, Governor Shaktikanta Das highlighted potential risks from geopolitical tensions and disruptions in trade routes.

Das expressed optimism about the outlook for agriculture and rural activity, pointing to a strong rabi wheat crop and expected improvements in kharif crops due to a normal monsoon. He emphasized the potential for increased private consumption driven by rural demand, employment growth, and positive momentum in key sectors.

The governor also noted positive signs for investment activity, including a broad-based upturn in private capital expenditure, robust government spending, healthy bank and corporate balance sheets, and rising business confidence. The RBI projects real GDP growth of 7.0 per cent for the fiscal year, with evenly balanced risks.

Das highlighted the importance of consumption in driving economic growth, with both rural and urban demand expected to contribute positively. He also pointed out the significant increase in resources flowing to the commercial sector, indicating strong support for economic activities.

On the global front, Das mentioned the resilience of the global economy and expectations for faster growth in global trade in 2024. However, he cautioned about challenges in achieving inflation targets and potential spillovers from debt issues in advanced economies to emerging markets.