India's central bank predicts 2020-21 GDP to contract 7.5 pct

Source: Xinhua| 2020-12-04 14:39:44|Editor: huaxia

MUMBAI, Dec. 4 (Xinhua) -- India's central bank expects the country's real gross domestic product (GDP) for the 2020-21 fiscal year (April 2020-March 2021) to contract by 7.5 percent compared to its earlier October estimate of a 9.5-percent contraction.

Speaking at a monetary policy meeting after keeping policy rates unchanged and maintaining accommodative stance on Friday, Reserve Bank of India (RBI) Governor Shaktikanta Das said, "High frequency indicators point to a recovery gaining traction, with double-digit growth in passenger vehicles and motorcycle sales, railway freight traffic, and electricity consumption in October, although there was moderation in some of these indicators in November."

Due to the pandemic-led lockdown, India's economy contracted by 23.9 percent and 7.5 percent in the April-June and July-September quarter of the current financial year, respectively.

Assuring ample liquidity through various financial instruments, the central bank governor said that supporting growth continued to be of paramount objective.

The RBI, which has so far slashed its key lending rate or the repo rate by 115 percentage points this year, has kept its repo rate unchanged at 4 percent, while the reverse repo rate or the key borrowing rate remained at 3.35 percent in its monetary policy released Friday.

Commenting on the outlook, Governor Das said consumers remained optimistic and business sentiment of manufacturing firms was gradually improving, while fiscal stimulus was increasingly moving beyond being supportive of consumption.

However, private investment was still slack and capacity utilisation had not fully recovered, he said. Enditem