The South Asian economy is expected to grow by 7.2% overall this year, as predicted, despite the moderation in India’s GDP growth in the first quarter, Reserve Bank of India Governor Shaktikanta Das stated on Thursday.
India’s economic growth in the April–June quarter was 6.7% year on year, less than the 6.9% estimated by pollsters and the 7.1% projected by the RBI. This was largely due to decreased government spending during national elections.
In a speech at the annual FIBAC banking conference, Das stated, “We are confident that the Indian growth story remains intact because the fundamental growth drivers of the Indian economy are not slowing, they are gaining momentum.
According to Das, a good monsoon will help agriculture perform better for the remainder of the year and support a further increase in rural demand. Strong investment activity will also result in a further boost from government capex picking up speed.
India’s growth trajectory is clearly sustainable. The two primary growth drivers, demand for investments and consumption, are increasing simultaneously. The RBI’s estimate of 7.2% GDP growth for 2024–2025 does not seem unrealistic.
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