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RBI Revises Downwards GDP Forecast For Current Financial Year To 7% from 7.2%

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The Reserve Bank of India (RBI) on Friday revised downwards India’s GDP forecast for the financial year 2022-23 to 7 per cent, from 7.2 per cent earlier. India’s GDP grew by 13.5 per cent in the June 2022 quarter.

While presenting the latest bi-monthly monetary policy statement, RBI Governor Shaktikanta Das said, “The headwinds from extended geopolitical tensions, tightening global financial conditions and possible decline in the external component of aggregate demand can pose downside risks to growth.”

He added that  taking these factors into consideration, real GDP growth for 2022-23 is projected at 7 per cent with that for the second quarter at 6.3 per cent; third quarter at 4.6 per cent; and fourth quarter at 4.6 per cent, with risks broadly balanced. “The growth for Q1:2023-24 is projected at 7.2 per cent.”

Das, however, said despite the unsettling global environment, the Indian economy continues to be resilient and there is a macroeconomic stability. The financial system remains intact, with improved performance parameters. The country has withstood the shocks from COVID-19 and the conflict in Ukraine.

“Our journey over the last two and half years, our steely resolve in dealing with the various challenges gives us the confidence to deal with the new storm that we are confronted with,” he added.

Rating agencies and other organisations have also cut their FY23 GDP projection for India recently. ADB has revised downwards GDP forecast to 7 per cent from 7.2 per cent earlier, Moody’s has cut its economic growth forecast to 7.7 per cent from 8.8 per cent, India Ratings has lowered the FY23 GDP expectations to 6.9 per cent from 7 per cent. State Bank of India has also reduced its FY23 India GDP forecast to 6.8 per cent from 7.5 per cent earlier.

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