India’s slow growth data leaves RBI’s economic goal unchanged, says Governor Das

The Reserve Bank of India (RBI) will stick to its economic growth estimation of 7.2 per cent for the financial year 2024-25 even though the country experienced a slowdown in the previous quarter. News agency Bloomberg reported quoting RBI Governor Shaktikanta Das speaking at the Federation of Indian Chambers of Commerce & Industry's (FICCI's) FIBAC 2024 “Banking for Viksit Bharat” conference in Mumbai on Thursday, September 5.

RBI officials will continue to focus their attention on the price stability factor, according to the central banker.

According to the report, Das said India's central bank's estimates for the year ended March 2025 are “not out of place”, even though last week's economic figures showed that the economy grew slower than estimated earlier.

The governor focused on the “last mile of disinflation,” which is when there is some optimism about the improvement of the outlook for food inflation. According to the report, the RBI is in no hurry to cut interest rates. The Reserve Bank of India has kept its key benchmark interest rates unchanged for over 18 months.

“The best contribution that monetary policy can make for sustainable growth is to maintain price stability,” said Das, as per the news report.

RBI to cut interest rates in the final quarter of 2024

Economists quoted by the news agency expect the central bank to cut interest rates in the final quarter of 2024 once the US Federal Reserve starts doing so.

Das focused on factors like private consumption and investment recovery, at the same time, a rebound in rural spending, bank credit to agriculture and manufacturing business improvement, which includes the small and medium (SME) segment firms, for his optimism on India's growth outlook.

“Fundamental growth drivers of the Indian economy are actually gaining momentum,” said Governor Das, as per the agency report. “They are not slowing. This gives us the confidence to say that the Indian growth story remains intact,” he said.

Governor Das expects new monetary policy committee members to be “appointed on time” for the October meeting, which is scheduled as per the news report. The existing term of the three external members of the MPC committee will end on October 4; the next MPC meeting is on October 9.