India's FY24 GDP growth could be 'very close' to 8%, says RBI Governor

India's FY24 GDP growth could be 'very close' to 8%, says RBI Governeor

The Indian economy's GDP growth in the current fiscal year ending in March could be "very close" to 8%, Reserve Bank of India (RBI) governor Shaktikanta Das said in an interview with television channel ET Now on Wednesday.

India's economy grew at 8.4%, its fastest pace in 18 months, in the final three months of 2023, led by strong manufacturing and construction activity. Following this data, the government revised its growth estimate for the 2024 fiscal year to March 31 to 7.6% from 7.3%.

"Our sense and understanding of the high frequency indicators and the momentum of economic activity tells us that this 5.9% growth (expected) in Q4 could be exceeded and when that happens, obviously, the (full year) growth will be more than 7.6%," Das said.

"And I think there is quite a good chance of the growth, GDP number for the current year, being very close to 8%."

Das said rural demand had been improving and was much stronger than a year ago, while urban demand continued to be very strong.

"Investment activity continues to be strong, driven by government capex and private capex also beginning to pick up particularly in certain key sectors like steel, some sectors related to construction activity, textiles, chemicals. So private investment is also picking up," he said.

The central bank has projected growth of 7% in the next fiscal year. Governor Das said he was very optimistic about next year and 7% was very much on the table.

He reiterated that the RBI's monetary policy committee remained focused on bringing inflation down to its target of 4% and, despite prices being on a clear downward trajectory, major uncertainties such as geopolitical and weather risks remained.

"There is no room for complacency at all and we need to remain focused and committed to our goal of maintaining financial stability and supporting economic activity in the country".