The Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced that the FY23 GDP growth forecast has been retained at 7.2%

-April-June GDP growth seen at 16.2%

-July-September GDP growth seen at 6.2%

-October-December GDP growth seen at 4.1%

-January-March 2023 GDP growth seen at 4.0%

The RBI Monetary Policy Committee voted unanimously to hike the benchmark interest rate by 50 basis points (bps) to 5.4% with immediate effect. It is now back to the pre pandemic levels, highest since 2019. The RBI Policy stance is retained at Withdrawal of Accommodation.

The Standing Deposit Facility (SDF) rate is adjusted to 5.15%. The Marginal Standing Facility (MSF) and bank rate are revised at 5.65%. 

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The Finance Minister Nirmala Sitharaman earlier this week
said that due to the measures taken by the government, India is in a much
better position than most countries. Citing to a survey, Sitharaman said there
is zero possibility of India getting into recession. Sitharaman said the GDP of
the US fell 0.9% in the second quarter following a 1.6% decline in the first
quarter. “They start calling it an unofficial recession. There is no
question of India getting into recession or stagflation,” said the

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Delivering his bi-monthly address announcing the Monetary Policy Committee’s (MPC) interest rate decision, Das said Indian economic activity was showing signs of broadening, with high-frequency indicators suggesting improvement in urban demand.

The picture for rural demand, however, is mixed.

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“Inflation is expected to remain above the central bank’s 6% threshold in the second and third quarters of this fiscal year, for which the MPC stressed that sustained high inflation could destabilise inflation expectations and harm growth in the medium,” RBI Governor Shaktikanta Das said.

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RBI Governor Shaktikanta Das while delivering his MPC statement said, the Indian economy is impacted by global situations. The globalisation of inflation coincides with the de-globalisation of trade, he said.

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Consumer price inflation has eased from its surge in April but remains uncomfortably high and above the upper threshold of the target, said Das.