RBI Reduces FY22 GDP Forecast to 9.5 %

The Reserve Bank of India (RBI) on Friday cut its forecast of real GDP growth at 9.5 per cent in the current financial year (2021-2022).

RBI Governor Shaktikanta Das said the economy is likely to grow at the rate of 18.5 per cent in first quarter, 7.9 per cent in second quarter, 7.2 per cent in third quarter and 6.6 per cent in fourth quarter.

The RBI had earlier forecasted 10.5 per cent GDP growth for FY22. For Q1, RBI had expected growth at 26.2 per cent, for Q2 at 8.3 per cent, for Q3 at 5.4 per cent and for Q4 at 6.2 per cent.

The central bank also projected consumer price index (CPI) inflation at 5.1 per cent for FY21-22.

"Adequate system level liquidity has been ensured and targeted liquidity to stressed entities have been provided," said Das.

The impact on economic activity is expected to remain contained due to lower restrictions amid the second wave of Covid-19 pandemic, he said.

The RBI also kept repo rate (the key lending rate) unchanged at 4 per cent and reverse repo rate (the borrowing rate) at 3.35 per cent.