RBI Pegs FY 2022-23 GDP Growth at 7.8 per cent

The Reserve Bank of India (RBI) pegged the country's Gross Domestic Product (GDP) growth for the financial year 2022-23 at 7.8 per cent, which is lower than 8 to 8.5 per cent expansion projected in the Economic Survey tabled in parliament 10 days back.

"Overall, there is some loss of the momentum of near-term growth while global factors are turning adverse. Looking ahead, domestic growth drivers are gradually improving. Considering all these factors, real GDP growth is projected at 7.8 per cent for 2022-23 with Q1:2022-23 at 17.2 per cent; Q2 at 7.0 per cent; Q3 at 4.3 per cent; and Q4 at 4.5 per cent," RBI Governor Shaktikanta Das said in the Monetary Policy Statement.

As per the first advance estimates of national income released by the National Statistical Office (NSO) on January 7, 2022, India's real gross domestic product (GDP) growth is likely to be 9.2 per cent for 2021-22.

Das said the real GDP growth at 9.2 per cent for 2021-22 takes it modestly above the level of GDP in 2019-20. Private consumption, the mainstay of domestic demand, continues to trail its pre-pandemic level. The persistent increase in international commodity prices, surge in volatility of global financial markets and global supply bottlenecks can exacerbate risks to the outlook.

"Going forward, government's thrust on capital expenditure and exports are expected to enhance productive capacity and strengthen aggregate demand. This would also crowd in private investment. The conducive financial conditions engendered by the RBI's policy actions will provide impetus to investment activity," the RBI Governor said.

"The surveys done by the RBI reveal that capacity utilisation is rising, and the outlook on business and consumer confidence remain in optimistic territory, which should support investment as well as consumption demand. The prospects for agriculture have brightened on good progress of winter crop sowing," he added.