Our surveys reveal that businesses in the manufacturing, services, and infrastructure sectors are upbeat about the future of their industries. On the other hand, lingering geopolitical concerns, tightening financial conditions around the world, and decreasing external demand could continue to pose challenges to domestic output. Real GDP growth for 2023u20132024 is predicted to be 6.4%, with Q1 growth of 7.8%, Q2 growth of 6.2%, Q3 growth of 6%, and Q4 growth of 5.8%. The risks are balanced the RBI Governor said.
Following the presentation of the 2019 Union Budget by Finance Minister Nirmala Sitharaman on February 2, 2023, the RBI’s MPC convened for the first time this year. The RBI had estimated the GDP growth prediction for FY2022-23 at 6.8%, with Q3 at 4.4% and Q4 at 4.2%, during its MPC meeting in December of last year. Then, a 7.1% GDP growth prediction for Q1 of FY24 was made. The government estimated the country’s GDP growth at 6u20136.8% in the Economic Survey FY 2022-23, which was published last month. This is the lowest annual GDP growth in the previous three years.
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According to Das, retail inflation is expected to be 6.5% for FY 2022-23 and 5.3% for FY 23-24, with Q1’s rate of inflation being 5.4%, Q2’s at 5.4%, Q3’s at 5.4%, and Q4’s rate of inflation being 5.6%. This falls within the 6% goal range set by the RBI.The governor claimed that a softening in food inflation as a result of a high deflation in vegetable prices caused the CPI inflation to drop by 105 basis points between November and December 2022 from its level of 6.8% in October 2022. Because of this, Q3 inflation for FY 2022-23 has come in below the RBI’s earlier projections.
The country’s headline retail inflation rate eased to a one-year low of 5.72% in December 2022 from 5.88% in the previous month, but continued to remain higher than FY22. Within the food inflation, vegetable prices fell the most, with the index down 12.7% in December 2022 compared to November 2022.
With negative momentum in November and December 2022, headline inflation has slowed, but the stickiness of core or underlying inflation is cause for concern. We require a significant slowing of inflation. We must continue to be steadfast in our resolve to lower inflation. Therefore, monetary policy must be adjusted to ensure a long-lasting disinflation process added Das.
According to the Economic Survey 2022-23, between April and December of last year, food inflation fluctuated between 4.2% and 8.6%, while the core inflation rate remained at roughly 6%, with the exception of April 2022. The RBI increased the repo rate by 25 basis points (bps) to 6.50% on Wednesday and ended its accommodative stance in an effort to lower the nation’s high inflation rate. The repo rate has been hiked for the 6th time in a row.
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