IMF, OECD Upgrade India’s GDP Forecasts as Inflation Eases to Multi-Year Low: RBI Bulletin
Mumbai:The Reserve Bank of India (RBI) has expressed strong confidence in the Indian economy, noting its continued resilience despite an uncertain global environment and projecting a trajectory of high growth.
The RBI’s latest October Bulletin highlighted several positive domestic indicators.
Key signals of improvement were noted in capacity utilisation and domestic demand, with lead indicators for both the manufacturing and services sectors demonstrating robust expansion. Furthermore, the report pointed to a revival in urban demand alongside strong rural demand.
A major factor underpinning the positive outlook is the significant easing of price pressures. The Bulletin revealed that the headline Consumer Price Index (CPI) inflation moderated sharply in September, reaching its lowest reading since June 2017.
RBI Governor Sanjay Malhotra commented on the favorable inflation environment. He stated that the “sobering of inflation has given greater leeway for monetary policy to support growth without compromising on the primary mandate of price stability.” This suggests that the central bank now has more policy space to potentially focus on supporting economic growth.
The optimism surrounding India’s growth story is being echoed by international bodies:
The International Monetary Fund (IMF) has revised its GDP growth projection for India upwards for 2025 by 20 basis points (bps) to 6.6 per cent.
The Organisation for Economic Co-operation and Development (OECD) also raised its 2025 growth forecast, increasing it by a significant 40 bps to 6.7 per cent from its earlier estimate of 6.3 per cent.
These upward revisions by multilateral organisations underscore the continued momentum being driven by strong domestic demand in the Indian economy.
