The RBI logo seen on the gate of its office in Mumbai.
The RBI logo seen on the gate of its office in Mumbai.FILE Photo | PTI

GDP growth at 7% in FY25, robust on back of healthy balance sheets of banks, corporates: RBI

The RBI, in its annual report for 2023–24, said the Indian economy is well-placed to step up its growth trajectory over the next decade in an environment of macroeconomic and financial stability.

MUMBAI: India's GDP growth is robust on the back of solid investment demand, which is supported by healthy balance sheets of banks and corporates, the government's focus on capital expenditure and prudent monetary, regulatory and fiscal policies, the RBI said on Thursday.

The Reserve Bank's Annual Report for 2023–24 said that the Indian economy is navigating the drag from an adverse global macroeconomic and financial environment.

The Indian economy is likely to grow at 7 percent in the current fiscal year starting April, the central bank said in its annual report.

The Indian economy, it said, expanded at a robust pace in 2023–24 (April 2023–March 2024 financial year), with real GDP growth accelerating to 7.6 percent from 7.0 percent in the previous year, the third successive year of 7 percent or above growth.

"The real GDP growth for 2024–25 is projected at 7.0 percent with risks evenly balanced," the central bank said, adding that the economy showed resilience in FY24 despite persistent headwinds.

The RBI logo seen on the gate of its office in Mumbai.
FDI into manufacturing sector down 18% in FY24: RBI Annual Report

Indian economy, the report said, is well-placed to step up growth trajectory over the next decade in an environment of macroeconomic and financial stability. "As headline inflation eases towards the target, it will spur consumption demand, especially in rural areas," it said.

It further said the external sector's strength and buffers in the form of foreign exchange reserves will insulate domestic economic activity from global spillovers.

The report, however, added that geopolitical tensions, geoeconomic fragmentation, global financial market volatility, international commodity price movements and erratic weather developments pose downside risks to the growth outlook and upside risks to the inflation outlook.

The RBI also emphasised that the Indian economy would have to navigate challenges posed by rapid adoption of AI/ML (artificial intelligence/machine learning) technologies as well as recurrent climate shocks.

The annual report is a statutory report of RBI's central board of directors. The report covers the working and functions of the Reserve Bank of India for the April 2023–March 2024 period.

The RBI logo seen on the gate of its office in Mumbai.
Unclaimed deposits with banks rise 26% to Rs 78,213 crore: RBI Annual Report

X
The New Indian Express
www.newindianexpress.com