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The article has been authored by RBI employees, including deputy governor M D Patra.
Based on high-frequency indicators and prediction models, a Reserve Bank of India article predicted that India’s gross domestic product will grow between 6.1 per cent and 6.3 per cent in the June-September quarter. “If this is realised, India is on course for a growth rate of about 7 per cent in 2022-23,” said the article in the State of the Economy report.
The monetary policy review in October projected the Q2 GDP growth at 6.3 per cent.
“With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook can best be characterised as resilient but sensitive to formidable global headwinds,” the article said.
There was a change in the thought of global central banks as some of them had slowed rate increases, and indicated that the end of rate hikes was in sight, the article said.
“…data arrivals of the most recent vintage on the far side of the Atlantic and in India suggest a grudging let-up in inflationary pressures. Consumer price index (CPI) inflation has somewhat eased across BRICS economies and in several other emerging market economies (EMEs) as well, benefiting from lower commodity prices,” it said.
“In the recent period, the US dollar’s rally to successive highs has sent currencies across the world into a downward spiral, but a closer look reveals that EME currencies are posting only half the losses seen in advanced economy (AE) currencies,” it said.
System liquidity was normalising in consonance with the stance of monetary policy but it was still in surplus mode, with the central bank absorbing about ₹1.5 trillion on a daily basis on average, the article said. “The effective absorption rate rose by 1.75 percentage points between end-April and mid-November in response to monetary policy actions,” it added.
Fibre2Fashion News Desk (DS)
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