GDP growth remains good due to good monsoon
RBI reduced its GDP growth forecast for current year to 7 per cent from 7.2 per cent, however this was more a statistical exercise as the first quarter GDP has come at 13.5 per cent versus RBI forecast of 16.2 per cent.
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Mumbai, Oct 14 RBI reduced its GDP growth forecast for current year to 7 per cent from 7.2 per cent, however this was more a statistical exercise as the first quarter GDP has come at 13.5 per cent versus RBI forecast of 16.2 per cent.
Murthy Nagarajan, head, fixed income, Tata MF, says, "Subsequent quarter nos was revised upwards. RBI expects growth to remain strong due to good monsoon, government capex push, pent up demand due to covid restrictions."
As per RBI Governor, 67 per cent of the fall in Forex Reserves is due to revaluation effect and RBI has only sold 24 billion USD in the current financial year, he added.
Current account deficit was offset by banking capital flows of 19 billion USD, this led to balance of payment surplus of 4.6 billion USD. The rupee depreciation has been around 10 per cent against the dollar which is lower than depreciation of advance economies like EURO 14 per cent, British pound 16 per cent and Yen 30 per cent as on October 05.
