January 17, 2024

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India’s growth momentum will be maintained in future years: RBI Governor | Business News

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India’s growth momentum is likely to be maintained in the coming years helped by the structural reforms undertaken over the past years and due to the macroeconomic and financial stability, said Reserve Bank of India (RBI) Governor Shaktikanta Das on Tuesday.

 

Speaking at the annual meeting of the World Economic Forum at Davos, Das said that this is an opportune time for investors to invest in India.

 

“India today deserves a much more serious look because of all that is happening in India. The interest this time around in India is genuine. There is a lot of international confidence in India, the technology story built around India, the growth prospects of India and the stability, that is, the macroeconomic and financial sector stability that India offers,” Das said during a fireside chat session.

 

“India’s growth momentum will be maintained in the future years. I see durable signs of India’s growth momentum being maintained. It is not a one-off comment. It is based on a lot of in-house research and analysis,” he said.

 

After a contraction of 5.8 per cent witnesses in FY2021, the Indian economy grew by 9.1 per cent in FY2022 and 7.2 per cent in FY2023, Das said. According to the first advance estimate, released by the National Statistical Office (NSO), the country’s economy is expected to grow at 7.3 per cent in FY2024.

 

Das’s statement comes on a day when global rating agency Fitch Ratings affirmed India’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB-’ with a stable outlook. India’s rating is underpinned by a robust medium-term GDP growth outlook and sound external finances, which remain intact as the country has effectively navigated a fraught external environment in the past few years, Fitch Ratings said.

 

Das said despite global challenges, the Indian banking sector has made a remarkable recovery. The RBI has taken a lot of steps to improve the governance in the public and private sector banks, strengthening the regulatory architecture around the non-banking finance companies.

 

When asked about the inflation outlook, Das said inflation has come under control and within the 2-6 per cent band, but the target is 4 per cent.

 

“RBI remains fully committed to bringing inflation closer to around 4 per cent. The trend for the moderation of inflation has begun. When we will reach 4 per cent, I cannot give a date, but we are moving towards that,” he said.

 

In December, the consumer price-based inflation (CPI) stood at 5.69 per cent, up from 5.55 per cent in November.

 

He said core inflation, a measure of the effectiveness of monetary policy, which had touched 6.1 per cent at one point and remained sticky at 6 per cent for some time, has started steadily coming down. In December, the core inflation eased to 3.8 per cent.

 

Das said the easing of core inflation gives confidence that monetary policy is working.

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