India's GDP: India's GDP growth to surpass government estimate of 7.6% in FY24: RBI Governor Das

The Indian economy is expected to grow at a rate higher than the central government's Second Advance estimate of 7.6 percent in the current fiscal year, Reserve Bank of India Governor Shaktikanta Das said on Wednesday.

“I would have no hesitation in saying India's GDP growth will cross 7.6% in FY24, it could be closer to 8%,” he said in an interview with ETNow.

Reiterating the forecast made during the February meeting of the Monetary Policy Committee, Das said he believes India could grow by 7 per cent in the next fiscal, including FY25, Das said.

“So 9.7%, 7% and 7.6%. If you take the average, it's 8%. And the 7.6 may be closer to 8%. So the momentum continues to be very strong and therefore we are right.” “I am optimistic about next year,” Das added.

“We have given a growth forecast of 7% for next year. We stay at 7%. But I will wait for the next MPC for our research teams to do their analysis, but at the moment I'm talking to you, “I would stick with the 7% that we have forecast for next year,” Das said, adding adding that “other forecasters have given much lower forecasts for next year.”

Das expressed confidence about the current quarter's numbers and said India's growth could be closer to 8% this year. “Implied growth for the fourth quarter is 5.9%. Our feeling and understanding of the high-frequency indicators and the dynamics of economic activity tell us that this 5.9% could be exceeded and if that happens, the growth will be more than 7.6%,” Das said. “And I think the growth prospects are quite good as the GDP number for the current year is very close to 8%,” he added.

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A similar claim was recently made by the State Bank of India in its research report 'Ecowrap'. “The third quarter GDP numbers have shocked the psyche and cognitive framework of most markets and even pleasantly surprised some. Clearly, the right policy prisms and perspectives can trump irrational expectations bordering on fault lines,” SBI said.

The Indian economy grew 8.4 per cent in the third quarter of FY24, beating analysts' expectations of 6.6 per cent growth, even as economists expressed concerns over slowdown in GVA growth.

The central government also revised up its forecast for India's growth in FY24 from 7.3 per cent to 7.6 per cent.

In his interview, the RBI Governor also spoke about the central bank's inflation targets and reiterated that they are focused on the 4 percent target and achieving this target sustainably.

“We are now focused on bringing inflation to the 4% target. Given the uncertainties we have, weather-related events etc., we would like inflation to be around 4% on a sustained basis,” Das said, adding that this cannot be a one-time achievement.

“It can’t just be a one-time number or just a one-month number that hits 4%. It must be around 4% sustainably and permanently. This gives us more confidence, but the direction is very clear.” “Inflation is on a downward trend,” Das added.