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RBI MPC policy: FY23 real GDP pegged at 7.8%; Q1 growth forecast at 17.2%

RBI MPC policy: FY23 real GDP pegged at 7.8%; Q1 growth forecast at 17.2%

RBI MPC policy: FY23 real GDP pegged at 7.8%; Q1 growth forecast at 17.2%
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By Bivekananda Biswas  Feb 10, 2022 1:01:42 PM IST (Updated)

The real GDP for the first quarter (Q1) has been projected at 17.2 percent, second quarter (Q2) real GDP at 7 percent, and third quarter (Q3) at 4.3 percent and fourth quarter (Q4) at 4.5 percent. The RBI has retained the economic growth rate for the current financial year at 9.2 percent.

The Reserve Bank of India's Monetary Policy Committee (MPC) on Thursday pegged real GDP growth at 7.8 percent for FY23 and said that the first quarter of the upcoming fiscal would see a 17.2 percent growth.

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The real GDP growth for the first quarter (Q1) has been projected at 17.2 percent, second quarter (Q2) real GDP at 7 percent, and third quarter (Q3) at 4.3 percent and fourth quarter (Q4) at 4.5 percent.
The RBI has retained the economic growth rate for the current financial year at 9.2 percent.
Das said there was some loss of economic momentum due to third pandemic COVID wave and the demand for contact intensive sector is still muted.
RBI Governor Shaktikanta Das while announcing the monetary policy kept repo and reverse repo rates unchanged at 4 percent and 3.35 percent, respectively.
The central bank retained retail (CPI) inflation for FY22 at 5.3 percent with Q4 inflation at 5.7 percent due to unfavourable base effects. CPI for January 2022 expected to move closer to upper tolerance band due to adverse base effects.
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CPI for FY23 projected at 4.5 percent, with Q1 at 4.9 percent, Q2 at 5 percent, Q3 at 4 percent, Q4 at 4.2 percent.
Abheek Barua, Chief Economist at HDFC Bank, said, “The RBI policy was largely on expected lines with, yet again, a clear emphasis on ensuring that the economy is on a path of durable growth recovery."
Barua said it showed a clear tilt toward growth and a view that inflation, where elevated, is driven more by the supply disruptions rather than entrenched demand-side pressures.
"Were that indeed the case, the RBI is likely to follow a gentle approach to the normalization and ultimately withdrawal of monetary support unlike Western central banks that have switched to a hyper-aggressive mode. This is consonant with the growth and inflation dynamics specific to India.”.
The three-day deliberations of the six-member MPC,  which is headed by RBI Governor, ended today. Ahead of the RBI policy meet, there was a consensus among analysts that the MPC will maintain status quo on repo rate.
For all the highlights of the RBI policy, please click here 
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