NEW DELHI: The Monetary Policy Committee (MPC) of the RBI on Thursday kept policy rate unchanged at 6.5% for the sixth time in a row and maintained its policy stance of withdrawal of accommodation.
The policy wordings indicate the central bank remains guarded against any inflation shock. The RBI maintains the FY25 inflation at 4.5%, which is 50 basis points higher than the inflation target of 4%.
Reserve Bank of India Governor Shaktikanta Das stated that the domestic economic activity was strengthening. He stated according to the first advance estimates (FAE) by the National Statistical Office (NSO), real gross domestic product (GDP) is expected to grow by 7.3% year-on-year in 2023-24 on account of strong investment activity.
On the supply side, gross value added (GVA) expanded by 6.9% in 2023-24, with manufacturing and services sectors as the key drivers. Looking ahead, the recovery in rabi sowing, sustained profitability in manufacturing, and the underlying resilience of services should support economic activity in 2024-25, Das said.
Considering various factors, real GDP growth for 2024-25 is projected at 7%, with Q1 at 7.2%, Q2 at 6.8%, Q3 at 7%, and Q4 at 6.9%. Das said the risks are evenly balanced.