Kolkata: Indian economy is expected to grow at a rate between 6.5% and 7% in the four quarters of the next financial year, Reserve Bank of India (RBI) governor Sanjay Malhotra said on February 7. “The economy is expected to grow at 6.7% in Q1, 7% in Q2, 6.5% in Q3 and 6.5% in Q4,” said the central bank boss. The MPC unanimously decided that a less restrictive monetary policy was needed given the lower trajectory of inflation in recent months.
Malhotra mentioned that the economy is expected to keep up its rate of “softer expansion” as indicated by the 6.4% GDP growth as mentioned in the first advanced estimates by MOSPI. The RBI governor asserted that agriculture sector is expected to perform well with reservoir water levels and Ravi crops holding promise. He also said that the corporate results (in current Q3 earnings season) indicate a mild recovery, highlighting how mining and electricity sectors are recovering from the monsoons impact (as indicated in Q2 numbers).
Rate cut to facilitate GDP growth
The Reserve Bank of India (RBI) unanimously decided to reduce policy rate by 25 basis points from the current 6.50% to 6.25%, raising hopes for an overall decline of cost of funds both for India Inc and decline in EMIs on existing loans. The announcement was made by new RBI governor Sanjay Malhotra on the morning of February 7. He hoped that the monetary policy decision will help in achieving the dual objectives of price stability and growth.
Food inflation expected to moderate
Outlining the inflation expectations for the next year, the RBI boss said that retail inflation will stand at 4.5% in Q1 of FY26, at 4% in Q2, 3.8% and 4.2% of the next year. He hoped that food inflation will continue to moderate. It needs to be mentioned that though the RBI is mandated to keep retail inflation levels between 2% and 6%, it aims for a long term goal to contain it around 4%. However, it needs to be mentioned that sudden supply shocks in food inflation is something that depends largely on natural causes and cannot be predicted. The RBI governor said that the MPC has decided to maintain a neutral stance as far as monetary policy is concerned.
Indian economy is expected to grow at a rate between 6.5% and 7% in the four quarters of the next financial year, Reserve Bank of India (RBI) governor Sanjay Malhotra said on February 7. he also mentioned that the retail inflation rates would vary 3.*% and 4.5% in the four quarters of the next financial year. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
