Growth expected to exceed 7% in FY23: RBI Governor

New Delhi: Reserve Bank Governor Shaktikanta Das on Wednesday said the growth for 2022-23 is expected to be more than the advance estimate of 7 per cent on the back of economic momentum maintained in the third and fourth quarters of the last fiscal.
As per the second advance estimate released by the National Statistical Office (NSO) in February, the economy is estimated to grow at 7 per cent in 2022-23 against 8.7 per cent in the preceding fiscal.
“There is a possibility that it could be even more…it will not be a surprise if the GDP growth of last year comes slightly above 7 per cent,” he said at a CII event here.
Provisional Annual Estimates for the year 2022-23 will be released on May 31, 2023.
For the current financial year, he said the RBI has projected a growth rate of 6.5 per cent.
About the global scenario, he said the coexistence of high inflation and banking stress is complicating the responses of central banks, as they face or trade-off between the risk of either straining financial markets or having to tolerate a longer period of high inflation.
“Amidst these global uncertainties, the Indian banking system remains stable and resilient with strong capital and liquidity positions, improving asset quality better provisioning coverage and improved profitability,” he said.
Das said the decision to tweak policy rates was not in his hand as he himself is driven by the situation on the ground.
In April, the Reserve Bank in a surprise move hit the pause button and decided to keep the key benchmark policy rate at 6.5 per cent.
Prior to it, the Reserve Bank of India (RBI) was on a rate hiking spree, raising the repo rate by 250 basis points since May 2022.
Speaking at an event organised by the industry chamber CII, Das said there is a suggestion that RBI will take a pause in the coming monetary policy meetings.
The last decision to hold rates should be seen as a pause, and not as a pivot, he said.
On global growth, he said the global economy is mired by geopolitical uncertainty, elevated inflation, volatile financial markets — including banking sector stress — food insecurity and debt distress, among others.
On the upside, there has been a slow upturn in global growth, easing of supply chains, moderation of inflation, normalisation of financial markets and reopening of Chinese markets, which have all improved sentiments, but the uncertainty continues, he said.
He assured that the country has sufficient forex reserves and the central bank has maintained the exchange rate of the rupee.
With regard to the internationalisation of the rupee, he said, the RBI has allowed international trade settlement in the rupee in 18 countries. As many as 17 banks have opened 30 special vostro accounts.

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