Amid a challenging global macroeconomic environment, India presents a picture of growth and stability, and the economy is expected to grow 7 per cent in fiscal 2024-25, said RBI Governor Shaktikanta Das, addressing an event at the World Economic Forum Meeting 2024 in Davos, Switzerland.
“Recent information on the global macroeconomic front has been reassuring, with inflation gradually descending closer to the target, even as growth has held up better than expected in almost all countries. Financial conditions have eased, and markets have scaled new highs. We expect the Indian economy to grow 7 per cent in fiscal 2024-25," said Das.
Das said that India remains the fastest-growing major economy, driven by strong domestic demand. He expressed optimism about real GDP growth, expecting it to reach 7.2 percent in the current fiscal year. Governor Das attributed the robust growth to the structural reforms implemented by the government in recent years, which have enhanced the medium- and long-term growth prospects of the Indian economy.
"With strong domestic demand, India remains the fastest-growing major economy; real GDP growth is expected at 7.2 per cent this fiscal," said Das.
Impact of monetary policy actions
Governor Das emphasised the positive impact of monetary policy actions, noting that headline inflation has substantially eased from the highs observed in the summer of 2022. He said that recent global macroeconomic developments have been reassuring, with inflation gradually approaching the target and growth holding up better than expected in various countries. Additionally, financial conditions have eased, and markets have reached new highs.
"Chances of soft landing have improved and markets have reacted positively. However, geopolitical risks and climate risks remain matters of concern," he said.
The RBI Governor said real GDP growth in India is expected at 7.2 per cent this year.
"With strong domestic demand, India remains the fastest-growing major economy... We have emerged stronger out of the recent spate of global shocks," he noted.
Das further said that the external balance is comfortably manageable with robust foreign exchange reserves.
"Headline inflation has substantially eased from highs of summer of 2022. This shows that our monetary policy action and rebalancing of liquidity is working. Core inflation has also gradually and steadily moderated, while proactive supply-side interventions by the government have also played a key role in handling food price shocks," he said.
(With PTI inputs)
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