India Central Bank’s Rosy Growth Forecast Baffles Economists
- RBI sticks to 7.2% projection despite signs of weaker spending
- Keeping rates too high can lead to policy misstep: analysts
This article is for subscribers only.
The Reserve Bank of India’s upbeat growth estimates for the world’s fastest-growing major economy is causing both confusion and concern among economists.
The central bank has stuck to its forecast that India’s economy will expand 7.2% in the year ending March 2025 despite recent evidence showing activity is starting to taper off. The RBI’s outlook is far more optimistic than the 6.5%-7% growth projected by Prime Minister Narendra Modi’s government. Investment banks like Goldman Sachs Corp. have already downgraded growth projections to as low as 6.5%.