Reserve Bank of India Governor Shaktikanta Das in a televised address after the meeting of the Monetary Policy Committee on Friday, 4 December, said that the RBI expects India’s economy to contract at a slower pace from -9.5 percent to -7.5 percent.
Das further added that the central bank is projecting GDP growth for Q3 at +0.1 percent and +0.7 percent for Q4.
“The real GDP growth for 2021 is projected at minus 7.5%. The recovery in rural demand is expected to strengthen further while urban demand is also gaining momentum”Reserve Bank of India Governor Shaktikanta Das
Goldman Sachs expects the Indian economy to contract by 10.3 percent in 2020-21, reported Live mint.
“The outlook for inflation has turned adverse relative to indications last two months. The MPC sees the inflation at 6.8 percent for Q3 (September-December) and 5.8 percent for Q4," Das said.
While outlining the Monetary Policy Committee decisions, Das said that the MPC had voted to leave the repo rate and reverse repo rate unchanged at 4 percent and 3.35 percent respectively.
He further added that the Marginal Standing Facility (MSF) rate and the bank rate remain unchanged at 4.25 percent.
The RBI Governor said that the MPC had decided to continue with accommodative stance on monetary policy as long as necessary, at least till the current financial year and into next year to revive growth on a durable basis and mitigate the impact of COVID-19 while ensuring that inflation remains within target.
“The MPC was of the view that inflation is likely to remain elevated with some relief in the winter months from prices of perishables and bumper Kharif arrivals,” he said.
Previous MPC Meet
After the previous MPC meet, Das announced on 9 October that they had voted unanimously to leave the policy repo rate unchanged at 4 percent. He also said that the reverse repo rate would remain unchanged at 3.35 percent.
"The MPC also decided to continue with the accommodative stance of monetary policy for as long as necessary at least through the current financial year and next year," he said.
(With inputs from NDTV and Livemint)
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