India's growth to be above 6% with strong macroeconomic stability, inflation to decline: RBI MPC member Ashima Goyal
Ashima Goyal also laid out the risk India's economy faces and said global slowdown affecting India's exports, oil & food prices, and erratic weather are some things to watch closely
PremiumReserve Bank of India's Monetary Policy Committee (MPC) member Ashima Goyal on Monday emphasized on the strengthening macroeconomic stability and performance of India's economy amid global shocks and said India's economic growth will be above 6% in the current fiscal year. Ashima Goyal also laid out the risk India's economy faces and said global slowdown affecting India's exports, oil & food prices, and erratic weather are some things to watch closely.
"India has managed to strengthen its macroeconomic stability and performance even in a period of large global shocks. India's GDP growth in FY24 will be above 6 percent," she told PTI in a telephonic interview.
Ashima Goyal's remarks come as the Indian economy recorded GDP growth of 7.2% during the fiscal year 2022-23. The growth was lower compared to 9.1% in 2021-22 and the central bank expects it to decline further to 6.5% in the current fiscal year.
Inflation to come around 4%
While speaking on inflation and when it will come down, Ashima Goyal said, "For a long time now, firms' inflation expectations have been around 4 percent. That means, despite cost shocks, their price increases do not exceed 4 percent."
Ashima Goyal stressed that core inflation is softening and the strategy of inflation targeting is teaching those who determine prices to disregard temporary disruptions in the supply chain. India's retail inflation declined to 6.83% in August from the 15-month high of 7.44% in July.
The MPC member added that in the face of recurring supply shocks, such as those arising from events like the Russia-Ukraine war, the adjustment of monetary policy should be sufficient to stabilize inflation expectations. However, it should be done in a manner that doesn't excessively hinder economic growth. "But other supply-side policies will continue to reduce inflation," she opined.
On rising oil prices
Ashima Goyal also addressed the recent rise in oil prices in the international market which breached the $90 per barrel mark for the first time in 10 months and said that the government and oil companies have built up counter-cyclical buffers by not passing a fall in international oil prices.
She noted that the hike in international oil prices is also pushing countries to diversify away from oil.
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