India to grow at 7% in FY25, inflation to ease further: RBI

Davos, January 17

Indian economy should record a growth rate of 7% in the next fiscal and inflation is likely to ease further, RBI Governor Shaktikanta Das said on Wednesday.

He also credited the government for structural reforms undertaken in recent years, saying they have boosted the medium and long-term growth prospects of the Indian economy. He said amid a challenging global macroeconomic environment, India presents a picture of growth and stability.

Speaking at a CII session on ‘High growth, low risk: The India story’ here during the World Economic Forum Annual Meeting, Das said recent information on the global economic front has been reassuring with inflation falling, though growth remains low.

“Chances of soft landing have improved and markets have reacted positively. However, geopolitical risks and climate risks remain matters of concern,” he said.

The RBI Governor said the real GDP growth in India is expected at 7.2% this year.

“With strong domestic demand, India remains the fastest growing major economy... We have emerged stronger out of the recent spate of global shocks,” he noted.

Das further said external balance is comfortably manageable with robust foreign exchange reserves.

“Headline inflation has substantially eased from highs of summer of 2022. This shows that our monetary policy action and rebalancing of liquidity is working.

“Core inflation has also gradually and steadily moderated, while proactive supply-side interventions by the government have also played a key role in handling food price shocks,” he said. — PTI

Domestic demand strong

With strong domestic demand, India remains the fastest-growing major economy. Headline inflation has substantially eased from highs of 2022. This shows our monetary policy action and rebalancing of liquidity is working. — Shaktikanta Das, RBI Governor

#Inflation #Reserve Bank of India RBI