Economic revival or mirage? RBI Governor Malhotra makes growth predictions for first time
Reserve Bank of India (RBI) Governor Sanjay Malhotra stated in his first comments on the growth outlook since assuming office earlier this month.
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In the foreword to the bi-annual Financial Stability Report released Monday, Malhotra highlighted the optimism for India’s economic trajectory. “Prospects for the Indian economy are expected to improve after the slowdown in the pace of economic activity in the first half of 2024-25,” he said.
The RBI governor also spoke of the resilience of consumer and business sentiment, stating, “Consumer and business confidence for the year ahead remain high and the investment scenario is brighter as corporations step into 2025 with robust balance sheets and high profitability.”
The new RBI governor’s approach
Bureaucrat Malhotra's appointment came as a surprise, announced just two days before he began his three-year term on December 11. Known for his bureaucratic career, Malhotra spoke of stability and growth in his first press briefing but refrained from offering specific guidance on monetary policy. His predecessor, Shaktikanta Das, maintained steady interest rates for nearly two years despite increasing pressure to cut rates. Analysts now anticipate that Malhotra may begin easing rates as early as February 2025.
The RBI’s revised growth forecast for the current fiscal year stands at 6.5%, a significant drop
