RBI Forecasts 6.5% GDP Growth Amid Global Challenges
The Reserve Bank of India has projected that India’s economy will grow by 6.5% in the fiscal year 2024–25, reinforcing its status as the fastest-growing major economy in the world. Despite the global turbulence and economic slowdowns seen in various parts of the world, India’s growth outlook remains strong, showcasing remarkable resilience.
The RBI noted that while the growth estimate is marginally lower than previous years, it remains healthy and well-aligned with the country’s long-term growth trajectory. Strong domestic consumption, steady investments, and reduced reliance on exports have helped shield the Indian economy from severe external shocks. This robust domestic demand has played a key role in keeping the economic momentum steady even amid global uncertainties.
RBI Economic Outlook
In a move to further support economic growth, the Reserve Bank of India has undertaken two successive interest rate cuts, bringing the benchmark rate down to 6%. Additionally, liquidity in the banking system has been bolstered with the infusion of over $70 billion through bond purchases and long-term foreign exchange operations.
The RBI’s Monetary Policy Committee has adopted an “accommodative” stance, emphasizing its commitment to nurturing growth while keeping inflation under control. Retail inflation figures have significantly improved, dropping to a five-year low of 3.34% in March, thus giving the central bank ample flexibility to continue its supportive policies without risking price stability.
With a stable financial system and proactive policy management, the RBI remains confident that India can maintain its growth momentum through fiscal year 2025, provided that domestic demand stays resilient.
Global Economic Impact
Even as domestic indicators remain positive, global factors continue to pose risks to India’s economic path. Fresh tariffs and trade tensions, particularly stemming from the United States, could potentially shave off up to 0.5 percentage points from India’s GDP growth.
Nevertheless, India’s strong macroeconomic fundamentals, including a favorable monsoon forecast, low inflation rates, and ongoing policy reforms, are expected to help the country navigate these challenges successfully. Policymakers remain optimistic that with strategic interventions and a focus on self-sustained growth, India will continue to march toward its long-term target of a 7% growth rate over the next decade.
The central bank reiterated that while global economic swings are inevitable, India’s internal strength, driven by consumption, investments, and a stable financial framework, will ensure it remains one of the key engines of global growth.
