GDP Growth Forecast Slashed From 6.1% to 5% by RBI Monetary Policy Committee for FY 2019-20, Inflation Target Also Revised
Contrary to the widespread expectation, the RBI decided not to slash the repo rate despite consecutive cuts in the previous MPC meetings. The central bank has decided to maintain the status quo, keeping the repo rate or the rate at which it lends to commercial banks fixed as 5.15 percent. The reverse repo rate and bank rate is is at 4.9 percent and 5.4 percent, respectively.
New Delhi, December 5: The Reserve Bank of India (RBI) has once again slashed the estimated growth rate of Gross Domestic Product (GDP) for the financial year 2019-20. The Monetary Policy Committee (MPC) of the central bank on Thursday announced a reduction in the GDP growth projection from 6.1 to 5 percent. RBI Keeps Repo Rate Unchanged at 5.15%, Reverse Repo at 4.90% and Bank Rate at 5.40%.
The sharp drop in GDP growth forecast comes two months after the MPC had predicted the economy to grow at 6.1 percent, instead of the 7.4 percent rate it had estimated earlier this year. Holistically, the RBI in the last six months has slashed its GDP growth estimate by a whopping 2.4 percentage points.
The MPC of central bank also rejigged the inflation targets for the current fiscal year. In what signals a situation of stagflation -- where inflation is rising despite the slump in demand -- the RBI has revised the retail inflation estimate to 4.7-5.1 percent for the second fiscal.
In the second quarter of FY 2019-20, the RBI has recorded the retail inflation to grow at 4.6 percent, way above the 3.4 percent growth rate estimated in the last MPC meeting.
Update by ANI
Contrary to the widespread expectation, the RBI decided not to slash the repo rate despite consecutive cuts in the previous MPC meetings. The central bank has decided to maintain the status quo, keeping the repo rate or the rate at which it lends to commercial banks fixed as 5.15 percent. The reverse repo rate and bank rate is is at 4.9 percent and 5.4 percent, respectively.
(The above story first appeared on LatestLY on Dec 05, 2019 12:26 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).