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RBI deputy governor says India growth may beat 6.7% forecast
RBI Deputy Governor Poonam Gupta said India's economic growth could exceed the central bank's 6.7% forecast and approach 7%, citing stronger-than-expected high-frequency indicators. In a speech on Thursday, Gupta said a 7.5%…
RBI Deputy Governor Poonam Gupta said India's economic growth could exceed the central bank's 6.7% forecast and approach 7%, citing stronger-than-expected high-frequency indicators. In a speech on Thursday, Gupta said a 7.5% long-term growth rate "is a given" for India, adding "we should aspire to do better than that."
Her comments add to optimistic assessments of India's outlook, with the country expected to remain the world's fastest-growing major economy. Minutes of the RBI's August policy meeting showed Gupta raised the possibility of a rate hike later this year. Market pricing now implies a 45-50% chance of a first rate increase in October, with a December hike fully priced in, according to ICICI Securities Primary Dealership economist Abhishek Upadhyay.
Indian Opinion Analysis
Gupta's hawkish shift matters because it signals the RBI may act before inflation risks become entrenched. India's one-year OIS rate jumped 11 basis points since the minutes, the most since May, reflecting traders pricing in three to four rate increases. The real test will be the April-June GDP data due this month: economists predict 6.9% to 8%. If the print is above 7.5%, pressure for an October hike will intensify. A 25-basis-point hike would raise the repo rate to 6.75%, directly impacting home and auto loan EMIs for millions of borrowers.
Source: livemint.com
This story was synthesised by AI from the source linked above.
