RBI Governor says India can achieve sustainable growth of up to 8% | Real Time Headlines

The Governor of the Reserve Bank of India said that India can achieve sustainable economic growth of up to 8% in the medium term.

He commented shortly after data India’s gross domestic product (GDP) growth slowed to 6.7% in the second quarter, down from 8.2% in the same period last year. Numbers are Increased pressure Central banks should start their own rate-cutting cycle sooner rather than later.

In an interview with CNBC Tanveer Gill Reserve Bank of India (RBI) Governor Shaktikanta Das said in an exclusive interview on Friday that India’s expected growth rate in the next few years is 7.5%, with “possibility of an increase.”

Das said it was difficult to say what healthy growth would look like in the world’s most populous country, but that in the medium term, growth of 7.5% to 8% “would be sustainable”.

India was previously described by the International Monetary Fund as “The world’s fastest growing major economy”, while Goldman Sachs explain India is expected to become the world’s second largest economy in 2075, surpassing Japan, Germany and the United States, and second only to China.

However, India’s growth rate has slowed in recent quarters, and the IMF warn In July, it was expected that economic expansion may slow to 6.5% in 2025.

In recent months, major central banks have begun to ease monetary policy, including European Central Bankthis bank of england and swiss national bank.

Federal Reserve generally expected Joining the rate-cutting club later this week puts further pressure on India to start easing policy.

“This seems to be rate cut season,” Das said. “But seriously, I want to emphasize that our monetary policy will be primarily influenced by our domestic macroeconomic conditions, domestic inflation (and) growth dynamics and prospects,” he added.

“So, we are governed by it. Yes, certainly, what’s going on around us, what the Fed is doing or what the ECB is doing or what some of the other central banks are doing… does affect us and we do look at that,” Das said .

“But, ultimately, our decisions are driven by domestic factors.”

Some economists believe the Fed should cut interest rates by 50 basis points, accusing the central bank of having previously “too far, too fast“With the tightening of monetary policy.

Others described the move as “very dangerous“For the market, it pushed the central bank to cut interest rates by 25 basis points.

“We’re not going to be affected by how much they cut rates, whether it’s 25 or 50, or how often they do it,” Das said of the prospect of the Fed cutting rates.

Asked whether the Reserve Bank of India’s Monetary Policy Committee (MPC) would actively consider a rate cut in early October, Das replied: “No, I can’t say that.”

“We will discuss and take a decision in the Monetary Policy Committee, but in terms of growth and inflation dynamics, I would like to say two things. One, the growth momentum continues to be good, India’s growth story is intact and so far , with inflation in terms of the outlook, we have to focus on sequential momentum,” he continued. “Based on that, we will make a decision.”