The Reserve Bank of India on Thursday projected the country’s Gross Domestic Product growth rate at 7.8% for the financial year 2022-’23.
For the first quarter (April-June) of financial year, the growth rate is expected to grow at 17.2%, followed by 7% in second quarter (July-September), 4.3% in third quarter (October-December) and 4.5% in the fourth quarter (January-March), the RBI said after its two-day Monetary Policy Committee meeting.
The central bank also kept the repo rate unchanged at 4%, and the reverse repo rate at 3.35%. This is the tenth consecutive time that the Monetary Policy Committee has maintained a status quo on the key interest rates.
Repo rate is the interest rate at which the central bank lends to commercial banks. The reverse repo rate, on the other hand, allows banks to deposit funds with the central bank and earn interest on them.
Reserve Bank of India Governor Shaktikanta Das said that the committee voted unanimously in favour of the keeping interest rates unchanged and decided to continue with its “accommodative” stance as long as necessary to support growth and keep inflation within its mandated target of 2% to 6%.
An accommodative monetary policy is when central banks expand supply of money in the markets to boost economic growth.
In a press briefing, Das said that India was charting a different course of recovery from rest of the world, reported ANI.
“India [is] poised to grow at fastest pace year-on-year among major economies as per projections by IMF [International Monetary Fund],” Das added. “This recovery is supported by large scale vaccination and sustained fiscal and monetary support.”
The central bank also retained its retail inflation projection for the financial year 2021-’22 at 5.3% and estimated that would contract to 4.5% in the next fiscal.
For the first quarter of financial year 2022-’23, retail inflation is projected at 4.9%, followed by 5% in second quarter, 4% in third quarter and 4.2% in the fourth quarter.
This is the first Monetary Policy Committee meeting since the Union Budget was presented on February 1.