Reserve Bank of India Governor Shaktikanta Das believes that India will be the fastest growing major economy showing 7 per cent growth in 2022-23 backed by our firm economic fundamentals and stable financial sector. The growth numbers are looking good in the current context, he noted.
“Our estimate is that India will grow by about 7 per cent. The IMF has projected that India will grow by about 6.8 per cent in the current year. And that puts India among the fastest growing major economies in the world,” the RBI Governor said at the HT Leadership Summit 2022.
Das asserted that the entire world has withstood multiple shocks, saying, “I call it triple shocks of COVID-19 pandemic, then the war in Ukraine, and now the financial market turmoil.” On what is behind the disturbance in the financial market, Das said that it is the policy tightening by central banks world over and especially those in advanced economies led by the US.
He further said in this kind of successive turmoils, European Union is facing a recession situation, but there are possibilities that it will avoid that. The US is holding stable, but there are other countries where the growth has slowed down.
“So far as India is concerned, economy, overall macroeconomic fundamentals, the financial sector stability, all these aspects remain resilient. The banking sector that is the financial sector is stable because of all the parameters with regard to banking or the non-banking lenders or the other major financial sector players,” he said.
October inflation
Even so, India has a major challenge with regard to inflation. While the retail inflation in September rose to 7.4 per cent from 7 per cent in August on higher food and energy costs, Das believes that the October number will be lower. “We expect the October number which will be released on Monday… to be lower than 7 per cent. So therefore, inflation is… a matter of concern with which we are now dealing and dealing effectively,” he said.
The RBI Governor also took note of India taking over the G20 presidency which comes at perhaps the most challenging year in modern times. India is assuming Presidency of G20 with stronger macroeconomic fundamentals compared to many other countries, Shaktikanta Das noted.
Meanwhile, he also clarified on the RBI using the forex reserves indiscriminately, stating that “it’s not so”. The reserves are being accumulated for “rainy days”, he added. “And when it rains, I have said it earlier also, you have to pick up your umbrella and use it. We didn’t pick up reserves just to keep it as a showpiece in the Reserve Bank of India,” he said.
India’s foreign exchange reserves dropped by $1.087 billion to $529.994 billion for the week ended November 4.
