RBI decreases the FY23 GDP Growth Forecast to 7.2%

On Friday, the Reserve Bank of India (RBI), lowered the GDP growth forecast to 7.2 per centpercent for the current financial year. Earlier, it projected a growth rate of 7.8 percent. After the Monetary Policy Committee's bi-monthly meeting, the Governor of the Reserve Bank of India, Shaktikanta Das, informed that in the first quarter of the current financial year, GDP growth is projected at 16.2 percent, at 6These.2 per centpercent in Q2; at 4.1 per cent in Q3 and Q4 at 4 percent. This estimates are made assuming that the crude oil price remains around  $100 per barrel during 2022-23. In his statement, he said: "As the horizon was brightening up, escalating geopolitical tensions have cast a shadow on our economic outlook. Although India's direct trade exposure to countries at the epicentreepicenter of the conflict is limited, the war could potentially impede the economic recovery through elevated commodity prices and global spillover channels. Further, financial market volatility induced by monetary policy normalisation in advanced economies, renewed Covid-19 infections in some major countries with augmented supply-side disruptions and protracted shortages of critical inputs, such as semi- conductors and chips, pose downside risks to the outlook." Additionally, RBI decided to maintain  the repo rate, or short-term lending rate, for commercial banksat 4 per cent at the Monetary Policy Committee (MPC).