Cuts FY22 growth forecast to 9.5%

Mumbai: The Reserve Bank on Friday lowered the country's GDP growth forecast for the current financial year by a percentage point to 9.5 per cent in view of the uncertainties created by the second wave of the coronavirus pandemic.

Observing that unlike the first wave, the impact of the second wave of Covid-19 is likely to be relatively contained, RBI Governor Shaktikanta Das said that taking several factors into consideration, "real GDP growth is now projected at 9.5 per cent in 2021-22 consisting of 18.5 per cent in Q1; 7.9 per cent in Q2; 7.2 per cent in Q3; and 6.6 per cent in Q4 of 2021-22."

He was addressing the media after the meeting of the rate-setting panel - Monetary Policy Committee (MPC). The Reserve Bank had earlier projected a growth rate of 10.5 per cent for 2021-22. Das noted that since the MPC's April meeting, the second wave of Covid-19 has surged across several States and has spread into smaller towns and villages, leaving a trail of human misery and tragedy.

As per the provisional estimates of national income released by the National Statistical Office (NSO) on May 31, 2021, India's real gross domestic product (GDP) contracted at 7.3 per cent for 2020-21, with GDP growth in the January-March quarter at 1.6 per cent (year-on-year).