India's GDP Growth Could Be Over 7 Per Cent In FY23, Says RBI Governor

Reserve Bank of India (RBI) Governor Shaktikanta Das stated at a Confederation of Indian Industry (CII) event that India's GDP growth for 2022-23 may exceed 7 per cent, and the previous fiscal year's GDP growth may be higher as well.

According to Das, the central bank's high-frequency indicators indicate sustained momentum in India's economy in the fourth quarter of the last financial year, and a growth rate above 7 per cent would not be unexpected.

The agricultural and services sectors have performed well, and there has been an increase in government capex and infra spending, Das said.

Private investment is also showing signs of revival, specifically in the steel and cement sectors.

The manufacturing sector's capacity utilisation is reportedly around 75 per cent, as per an RBI survey, but higher according to CII survey, Das said.

India's growth is expected to log approximately 6.5 per cent this fiscal year, but there are downside risks.

Das stated that the fight against inflation is still ongoing and urged against complacency.

The upcoming retail inflation rate is expected to be below 4.7 per cent, while the impact of El Nino remains to be seen.

The Reserve Bank decided to maintain the benchmark policy rate at 6.5 per cent in April in a surprise move.

Das said there is a suggestion that RBI will take a pause in the coming monetary policy meetings.

India's consumer price inflation (CPI) dropped to 4.7 per cent, an 18-month low, in April due to reduced food prices, from 5.66 per cent in the preceding month.

May's inflation data will be released on 12 June.

The last time that the country's retail inflation was closest to the 4 per cent mark was in January 2021, at 4.06 per cent.