RBI MPC keeps FY25 GDP forecast unchanged at 7%, flags worries of high global debt spilling over

The Reserve Bank of India's rate-setting panel while projecting a positive outlook for the ongoing financial year, kept the real GDP growth forecast for FY25 unchanged at 7 per cent.

The Monetary Policy Committee (MPC) sees Q1FY25 growth rate at 7.1 per cent, Q2 at 6.9 per cent, Q3 and Q4 at 7 per cent each, with risks evenly balanced.

"The rural demand is catching up, consumption expected to support economic growth in FY25," RBI governor Shaktikanta Das said. However, he warned that the high global debt-to-GDP ratio may have spill-over effect on emerging economies.


Das said that while the global growth has remained resilient, the recent uptick in crude oil prices need to be closely monitored. "The continuing geopolitical tensions pose upside risks to commodity prices," Das said.

While announcing the outcome from its April 3-5 meeting, the RBI governor said that the MPC once again voted to keep the benchmark lending rates unchanged at 6.5 per cent, for the seventh consecutive time.

"Growth, inflation dynamics have played out favourably," Das said.

The RBI's reading of growth prospects has largely remained consistent in recent months, with expectations of a steady global growth amid geopolitical uncertainties.

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The MPC in its February 2024 meeting forecast India to grow at 7 per cent in FY25. It further projected Q1FY25 growth at 7.2 per cent, Q2 at 6.8 per cent, Q3 at 7 per cent and Q4 at 6.9 per cent, with risks evenly balanced.

India in Q3FY24 grew at 8.4 per cent, thumping analysts' forecast.

"Among the key drivers on demand side, household consumption is expected to improve, while prospects of fixed investment remain bright owing to upturn in the private capex cycle, improved business sentiments, healthy balance sheets of banks and corporates; and government’s continued thrust on capital expenditure," the MPC had said in its February meeting, the last one in FY24.