New Delhi: The Reserve Bank of India (RBI) is anticipated to keep up its coverage charge throughout its upcoming assembly subsequent week, as GDP progress slowed considerably within the second quarter of FY25.
However, the chance of a charge minimize in February has elevated, in keeping with a report by HDFC Bank. The nation’s GDP progress for Q2 FY25 slowed to five.4 per cent year-on-year, down from 6.7 per cent in Q1.
Gross Value Added (GVA) progress additionally moderated to five.6 per cent in Q2 from 6.8 per cent within the earlier quarter, highlighting a broad-based financial slowdown.
The report acknowledged, « We anticipate that the RBI will maintain the current policy rate at its meeting next week, although the likelihood of a rate cut in the February policy has increased post this weaker-than-expected GDP data. »
The report identified indicators of weak point on the demand aspect. Consumption progress slowed, notably as a consequence of weaker city demand, as mirrored in high-frequency indicators.
A moderation in leveraged consumption was additionally famous, with slower progress in unsecured retail lending, together with private loans and bank cards.
It added, « Furthermore, overall investment growth also moderated as government capex spending tracked lower compared to last year, and private investment remained muted. »
On a constructive notice, the report prompt that rural demand is prone to get well within the second half of the fiscal 12 months. This optimism relies on sturdy agricultural efficiency, payouts beneath authorities schemes, and elevated authorities spending.
The report mentioned, « A recovery in rural demand—driven by strong agricultural performance, government scheme payouts, and increased spending—is expected to drive economic activity in the second half of the year. »
In its final assembly in October, the Monetary Policy Committee (MPC) of the RBI saved the coverage repo charge unchanged at 6.5 per cent for the tenth consecutive time. However, as per the report, weaker-than-expected GDP information has elevated the possibilities of a charge minimize in February. For now, the report famous that the RBI is anticipated to undertake a wait-and-watch strategy, conserving the present coverage charge unchanged in its upcoming assembly.
Content Source: zeenews.india.com