GDP growth may turn positive by Q4: RBI chief Shaktikanta Das
The RBI today kept repo rate unchanged while maintaining an accommodative stanceRBI sees FY21 GDP contracting by 9.5%
RBI chief Shaktikanta Das today said that the mood of the nation is shifting from despair and fear to hope, adding that GDP growth may turn positive by the fourth quarter. The rural economy looks resilient despite the covid pandemic, he said.
RBI sees FY21 GDP contracting by 9.5%, he said. The RBI had so far refrained from providing any forecasts on growth due to the heightened uncertainty.
There is an expectation of three-speed recovery in economic activity, with variation among the sectors, he said.
RBI expects inflation to come down in the third and fourth quarter as supply constraints ease. The monetary policy committee has decided to the look through the current inflation as a transient phase, the RBI chief said.
August inflation, at 6.69%, held above the top end of the RBI's medium-term target range of 2-6% for the fifth consecutive month amid supply disruptions.
As widely expected, the newly appointed monetary policy committee of the Reserve Bank of India today kept repo rate unchanged at 4%. All 66 respondents in a Reuters poll had expected the RBI to keep the repo rate steady.
The RBI has far slashed rates by 115 basis points so far this year to support the economy amid the COVID-19 pandemic.
The RBI however is expected for the first time since February provide guidance on how the economy is performing amid the coronavirus pandemic and give its outlook on inflation and growth.
The RBI said it will hold the MPC meeting from October 7 to October 9, having delayed it by a week in order to give the government time to appoint three new external members to the panel. The MPC which was earlier scheduled to meet between September 29 to October 1.
The government named its nominees late on Monday. Ashima Goyal is currently a member of Indian Prime Minister Narendra Modi's economic advisory council, while Shashanka Bhide is a senior advisor at the National Council for Applied Economic Research - a New Delhi-based think - and Jayanth Varma is currently a finance and accounting professor at the Indian Institute of Management, Ahmedabad.
They joined three RBI members on the panel.
Analysts say that the central bank must manage high retail inflation while keeping policy accommodative to support an economy which nosedived 23.9% last quarter, the weakest performance on record. India is gradually reopening its economy from a lockdown.
(With Agency Inputs)
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