In its monthly bulletin released on Tuesday, the Reserve Bank of India RBI stated that the competition between Indians to expand their deposit base may force them to increase their FD rates. Since starting to hike the repo rate last year, Indian has raised deposit. Since May 2022, the repo rate has been increased by 250 basis points bps. The Indian economy is unlikely to face any major repercussions from the ongoing global financial turmoil, according to the bulletin.
India would not slow down compared to the global economy, it said. It would maintain the pace of expansion achieved in 2022 -- 23.
India had emerged from the pandemic years stronger than initially thought, with the agriculture sector seeing a seasonal uptick, the industry emerging out of contraction and services maintaining momentum, according to the bank.
Consumer price inflation remains high and core inflation continues to defy the softening of input costs, it raised concerns over sustained price rises.
In February, inflation was only marginally lowered to 6.44 per cent from 6.52 per cent in January, keeping it above the central bank's mandated target band of 2 -- 6 per cent.
The bulletin said India's agriculture sector is in a seasonal uptick, whereas the industry is emerging out of earlier contraction and services have maintained momentum as well.
India has emerged stronger than initially thought, even as global growth is poised to slow down or even enter a recession in 2023, as global financial markets wager on the spread of the disease, according to the report. The central bank's forecast for real GDP growth for the fourth quarter of the current year is 5.3 per cent.
India's economy grew by 4.4 per cent in the third quarter and is expected to expand by 7 per cent for the fiscal year ending March after recording a growth of 9.1 per cent in 2021 -- 22.
The RBI is expected to go for another 25 bps hike in April, according to experts. This will take the repo rate to 6.75 per cent.
With agency inputs