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Real GDP growth to range from 7.4 to 7.9 percent in FY20: RBI

Mumbai: The Reserve Bank of India (RBI) has assessed that the real Gross Domestic Product (GDP) growth for Financial Year 2020 will range from 7.4 to 7.9 percent.

The six-member Monetary Policy Committee (MPC) of the Central Bank in its bi-monthly Monetary Policy Statement, remarked that the April-June GDP growth is seen at 7.1 percent, and the July-September GDP growth is seen at 7.4 percent.

Moreover, the real GDP growth in the Financial Year 2019 is seen at 7.4 percent as against 6.6 percent in Financial Year 2018.

The Reserve Bank of India had also maintained that the Consumer Price Index (CPI) inflation forecast for the second half of Financial Year 2019 is cut to 4.4 percent from 4.5 - 4.6 percent.

Meanwhile, the CPI inflation forecast for the first half of the Financial Year 2019 is cut to 4.7 - 5.1 percent from 5.1 - 5.6 percent.

"CPI inflation has eased to 4.4 percent in February and excluding the estimated impact of increase or adjustment in the house rent allowances for central government employees under the seventh Central Pay Commission, it is estimated at an even lower 4.1 percent," said RBI Governor Urjit Patel.

Patel added that the aggregate demand is expected to strengthen this year.

"Aggregate demand is expected to strengthen during the course of 2018-19. Normal monsoon and effective food supply management were seen as mitigating factors. Overall the MPC assessed risks to inflation are tilted to the upside," he said.

He, however, maintained that external demand could be hit owing to crude oil prices and global trade wars.

"On the growth outlook, the MPC was of the view that the pace of economic activity could accelerate in 2018 -19, on clearer signs of revival in investment activity, and sustained improvement in global demand. On the flip side, external demand could be adversely impacted should crude oil prices persist at elevated levels or even increase and trade protectionism intensify," he concluded.

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