India’s Gross Domestic Product growth could be above 7% for the financial year 2022-’23, Reserve Bank of India Governor Shaktikanta Das said on Wednesday, reported Reuters.

He made the statement at an event organised by the Confederation of Indian Industry in Delhi.

The governor of the central bank said that nearly all high-frequency indicators showed that there was sustained momentum in the final quarter of the previous financial year.

“The agricultural sector has done well and so has the services sector,” Das said, reported the Economic Times. “Capex [capital expenditure] and infra [infrastructure] spending by the government has picked up.”

He also noted that there was evidence of a revival of private investment as well, and that there were visible signs of it in the steel and cement sectors.

The chief of the central bank also said that in the financial year 2023-’24, growth in the gross domestic product is expected to be at 6.5%, reported Reuters. Last month, the International Monetary Fund had lowered the country’s economic growth projection for 2023-’24 to 5.9% from 6.1% in January.

Das noted that although India’s inflation had moderated, there was no room for complacency. “We will have to see how the El Nino factor plays out,” he said.

India’s retail inflation dropped to 4.70% in April from 5.66% in March, while wholesale inflation dropped to -0.92% in the last month, which was the lowest since July 2020.

The El Nino phenomenon involves the warming of ocean surface temperatures in the eastern and central Pacific. It typically occurs every few years and has been linked to crop damage, fires and flash floods.

Last month, India’s weather department predicted that the country will get normal rainfall during this year’s monsoon. India is expected to receive 96% rainfall of the Long Period Average, the Meteorological Department had said.

The Long Period Average is the mean rainfall recorded in monsoon seasons in India between 1971 and 2020. A monsoon is considered to be normal if the country receives between 96% and 104% of the average rainfall in a year.

Timely and normal rains are critical for the country’s farm output as the weather department has already warned of heatwaves in most parts of the country from April to June. Heatwaves hurting the farm output could be bad news for India’s inflation levels.