RBI Predicts 7% GDP Growth in FY24: 'Conservative Estimate'

Mumbai, Dec 8 (PTI) Reserve Bank Deputy Governor Michael Patra on Friday termed the revised 7 per cent growth expectation of the RBI as a “conservative estimate".

Speaking to reporters after the announcement of the bi-monthly policy review, Patra said the real GDP growth in the first half of the fiscal year has beat all estimates, including the RBI's.

Patra said if one were to add the RBI's estimates for the second half, the GDP growth for FY24 will come at 6.9 per cent. But, the high frequency data for October and November points to robust economic activity.

“So at the current time, 7 (per cent) is like a conservative estimate," the Deputy Governor in-charge of the important monetary policy department said.

Earlier in the day, the Reserve Bank sharply revised up its GDP estimate for FY24 to 7 per cent from the earlier expectation of 6.5 per cent. Many watchers were expecting the RBI to do the revision, but the 0.50 per cent push was not expected by any analyst.

On growth, Governor Shaktikanta Das said that the demand for two-wheelers is high as seen in over 20 per cent growth during the festive season and also added that fast moving consumer goods companies are also reporting a turnaround in rural demand.

He added that private capex is also showing signs of revival, particularly in sectors like petroleum, steel cement and chemicals, and pointed out that capacity utilization has reached a threshold at 74 per cent.

“It has reached a point where we can expect private investment also to start picking," he said.

"Many companies in the manufacturing sector are using their own internal reserves and surpluses to invest. They're not approaching the bank or they're not resorting to any other kind of borrowing or raising funds. They're using their own internal reserves and surplus for investment," Das said.

Das also said that there is growing international confidence in India's economy, and he has seen the same in interactions with governors of other central banks, other regulators and foreign investors.