Agencies
SINGAPORE: India's growth outlook reflects the underlying strength of country's macro-fundamentals, with domestic drivers — private consumption and investment — playing a major role, RBI Governor Shaktikanta Das said on Friday.
Moreover, the country's growth trajectory is supported by an environment of macroeconomic and financial stability, he said in a keynote address at the Future of Finance Forum 2024 organised by the Bretton Woods Committee, Singapore.
The Indian economy rebounded from severe contraction due to the COVID-19 pandemic and averaged real GDP growth of above 8 per cent during 2021-24.
For 2024-25, the Reserve Bank of India (RBI) has projected the real GDP growth at 7.2 per cent, with risks evenly balanced around this forecast.
“This growth outlook reflects the underlying strength of India's macro-fundamentals, with domestic drivers — private consumption and investment — playing a major role,” he said.
On inflation, Das said it has moderated from a peak of 7.8 per cent in April 2022 to the tolerance band of +/- 2 per cent around the target of 4 per cent, but “we still have a distance to cover and can not afford to look the other way”.
The Reserve Bank's projections indicate that inflation is likely to ease further from 5.4 per cent in 2023-24 to 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26, the Governor said.
The retail inflation based on the Consumer Price Index (CPI) remained below the Reserve Bank's median target of 4 per cent for the second month in a row in August at 3.65 per cent. It was at a five-year low of 3.6 per cent in July.
“Meanwhile, fiscal consolidation is underway and public debt levels are on a declining trajectory over the medium-term. Corporate performance has improved strongly, enabling deleveraging and strong growth in profitability,” he said.
The Governor further said that balance sheets of banks and non-banking financial intermediaries, regulated by the Reserve Bank of India, have also strengthened. “Our stress tests reveal that these financial intermediaries will be able to maintain regulatory capital and liquidity requirements even under severe stress scenarios,” he said.
Das also stressed that India's vision of global progress emphasises international cooperation that is people-specific, ambitious, action-oriented and decisive.
India's G20 Presidency in 2023 and its continuing contributions thereafter reflects New Delhi's vision of the world being one earth, one family with one future.
These priorities include strengthening the Multilateral Development Banks (MDBs) to address shared global challenges of the 21st century; achieving financial inclusion and productivity gains through digital public infrastructure; debt resolution for lower and middle-income countries; and financing cities of tomorrow, among many others, Das said.
“India remains committed to the reshaping of the global order in the decades ahead for the betterment of the world. It is now time for everyone to work for ‘one future' for the entire mankind,” he said.
