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India’s economic growth to slow down to 6.4% in 2023-24: RBI

Mumbai: The  Reserve Bank of India (RBI) projected India’s economic growth to slow down to 6.4% in 2023-24 fiscal year. The GDP growth rate is at  7% in the current fiscal. Reserve Bank of India Governor Shaktikanta Das  informed this while announcing the bi-monthly monetary policy. He said that  risks from geo-political tension and tightening global financial condition are the main reason for this slowdown.

RBI also  projected retail inflation to ease to 5.3% in next fiscal from 6.5% this year. The RBI’s inflation outlook for current fiscal has improved from 6.8% projected earlier, to 6.5%.

The apex bank in the country has also hiked the repo rate by 25 basis points to 6.50%. This is for sixth time in a row that the central bank is hiking the  key lending rates. After this hike by the RBI, banks are expected to raise interest rate in retail loans. So, the monthly EMIs of all retail loans will go up soon.

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Repo rate is the key interest rate at which the RBI lends short-term funds to commercial banks.   Repo rate is used by monetary authorities to control inflation.

Since May last year, the RBI has increased the short-term lending rate by 225 basis points. The decision was taken to contain inflation. In its December monetary policy review, the central bank raised the key benchmark interest rate (repo) by 35 basis points (bps)

 

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