Reserve Bank of India, after holding a three-day meeting of the RBI's Monetary Policy Committee (MPC), said the country's real Gross Domestic Product (GDP) growth in 2021-22 was 8.7%. According to the provisional estimates released by the National Statistical Office (NSO), this level of real GDP in 2021-22 has exceeded the pre-pandemic. While unveiling the third monetary policy for the current fiscal, RBI Governor Shaktikanta Das said that in Q4:2021-22, real GDP growth decelerated to 4.1% from 5.4 in Q3. He highlighted that the position was dragged down mainly by weakness in private consumption on the back of the COVID-19 driven Omicron wave.
Statement by Shri Shaktikanta Das, RBI Governor https://t.co/U3sHH9bKAw— ReserveBankOfIndia (@RBI) June 8, 2022
Further, he maintained that the Indian economy has shown a positive trend in April-May 2022, with urban demand recovering and rural demand gradually improving. According to the assessment of the RBI, merchandise exports posted robust double-digit growth for the fifteenth month in a row during May while non-oil and non-gold imports continued to expand at a healthy pace, pointing to a recovery of domestic demand. "Overall system liquidity remains in large surplus, with the average daily absorption under the LAF moderating to ₹5.5 lakh crore during May 4- May 31 from ₹7.4 lakh crore during April 8 - May 3, 2022, in consonance with the policy of gradual withdrawal of accommodation," said Das during the conference on Wednesday.
"Money supply (M3) and bank credit from commercial banks rose (y-o-y) by 8.8 per cent and 12.1 per cent, respectively, as of May 20, 2022. India’s foreign exchange reserves were placed at US$ 601.4 billion as of May 27, 2022," he added.
Meanwhile, the RBI governor noted that the consumer price index (CPI) inflation rose further from 7% in March 2022 to 7.8% in April 2022. He said that the trend reflects a broad-based increase in all its major constituents. Further, he stressed that food inflation pressures are accentuated, led by cereals, milk, fruits, vegetables, spices and prepared meals. Fuel inflation was driven up by a rise in LPG and kerosene prices. "Core inflation (i.e., CPI excluding food and fuel) hardened across almost all components, dominated by the transport and communication sub-group," he said.