Over the last bi-monthly monetary policy meeting to date, India’s GDP growth rate for the fiscal year 2021-22 was forecast by the Reserve Bank of India at 10.5%. The outlook for growth has improved dramatically and the vaccination push will further support the economic recovery, RBI said on Friday. The apex bank expects the Indian economy to rise from 8.3 percent to 26.2 percent in the first half of FY22, followed by a 6 percent increase in Q3FY22. The projections of the Central Bank for GDP growth are smaller than the 11 percent estimate of the Ministry of Finance.
The Economic Survey published last week forecast a V-shaped economic rebound, with GDP growth of 11 percent in FY22. GDP is forecast to decline by 7.7% in the current fiscal year.
Consumer Price Based-Inflation dropped down 6 percent to 4.3 percent in Q3FY21 for the very first time since the lockdown was declared. The decline in the CPI was underpinned by declining vegetable prices and a favorable foundation. RBI expects the prices of vegetables to stay sluggish in the near term. Governor Das predicted the CPI to be 5.2% for Q4FY21, compared to the 5.8% forecast earlier. It also revised consumer price inflation to 5-5.2 percent for the first half of FY22, compared to the 5.2-4.6 percent forecast earlier.
“Budget 2021-22 has provided a strong impetus for the revival of areas such as health and well-being, infrastructure, innovation, and research, among others”, Das added.