India's GDP likely to contract 9.5 per cent in FY 2020-21, says Reserve Bank
New Delhi | Jagran News Desk: The Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that the country's real GDP is likely to contract 9.5 per cent in the financial year 2020-21. Das, however, expressed hopes that the GDP may turn positive by the fourth quarter of 2020, breaking out of the coronavirus-induced contraction. The RBI Governor also claimed that the deep contractions of Q1 due to the coronavirus pandemic are behind us. He said that several indicators have pointed towards the easing of contraction and there is an emergence of impulses of growth.
Below are the key points to know
- While announcing the decisions by the Monetary Policy Committee, RBI Governor Shaktikanta Das said that the current inflation is hump transient and the agriculture outlook looks bright while oil prices are likely to remain rangebound.
- The Reserve Bank of India, Das said, will maintain a comfortable liquidity position. Also, Rs 20,000 crore-OMO auction will take place next week, he informed,
- A modest recovery in 1st half of the year could further strengthen in 2nd half; economic activity to gain traction in Q3. By the fourth quarter, GDP may turn positive.
- "Relative to pre-COVID levels, several high-frequency indicators are pointing to the easing of contractions in various sectors... and the emergence of impulses of growth... By all indications, the deep contractions of Q1 are behind us," he said.
- The inflation is likely to remain at elevated levels in September, but Das hoped it will ease in the third and fourth quarters of the current financial year.
- The RBI MPC has kept key lending rate unchanged at 4 per cent. The reserve repo rate has also been kept unchanged at 3.35 per cent.
Posted By: Shashikant Sharma