RBI Adjusts GDP Growth Projection to 6.6% for 2024-25
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New Delhi, Dec 6 (NationPress) The Reserve Bank of India has revised its projection for India's GDP growth for the fiscal year 2024-25 down to 6.6 percent, a decrease from the 7.2 percent forecast previously, as stated by RBI Governor Shaktikanta Das on Friday.
He elaborated that this adjustment was prompted by the actual growth in real GDP for the second quarter of this year, which stood at 5.4 percent, falling significantly short of expectations.
Nonetheless, Das expressed confidence in India's growth trajectory, noting that “high-frequency indicators indicate that the slowdown in domestic economic activity has likely reached its lowest point in the second quarter of this year and has been recovering since, bolstered by robust festive demand and an upturn in rural activities.”
The slowdown was primarily attributed to a notable decline in industrial growth, which dropped from 7.4 percent in the first quarter to 2.1 percent in the second quarter, driven by lackluster performance in manufacturing, a decrease in mining activities, and reduced electricity demand.
However, Das pointed out that the challenges faced by the manufacturing sector were not widespread but rather confined to specific industries, such as petroleum products, iron and steel, and cement.
He added that industrial activity is on track to normalize and recover from the lows experienced in the previous quarter.
The RBI has also lowered its GDP growth forecast for Q3 FY25 to 6.8 percent from 7.4 percent, and reduced the Q4 growth target to 7.2 percent from 7.4 percent. Additionally, the Q1 FY26 projection has been adjusted to 6.9 percent from 7.3 percent.
During its monetary policy meeting in October 2024, the RBI initially projected India's GDP growth at 7.2 percent for FY25, exceeding the 6.5-7 percent range indicated in the Finance Ministry's Economic Survey. The estimated growth rates for the quarters were 7 percent for Q2 FY25, 7.4 percent for Q3, 7.4 percent for Q4, and 7.3 percent for Q1 FY26.
