The RBI has projected India’s real GDP growth for 2024-25 at 7.0 per cent as it expects the growth momentum to continue into the next financial year while it sees inflation coming down to 4.5 per cent given a normal monsoon.

The quarterly break-up of the growth has been projected for Q1 at 7.2 per cent; Q2 at 6.8 per cent; Q3 at 7.0 per cent; and Q4 at 6.9 per cent

“Looking ahead, recovery in rabi sowing, sustained profitability in manufacturing and underlying resilience of services should support economic activity in 2024-25,” the RBI said in a statement.

Among the key drivers on the demand side, household consumption is expected to improve, while prospects of fixed investment remain bright owing to upturn in the private capex cycle, improved business sentiments, healthy balance sheets of banks and corporates; and government’s continued thrust on capital expenditure, according to the RBI.

Improving outlook for global trade and rising integration in the global supply chain will support net external demand, it added.

However, headwinds from geopolitical tensions, volatility in international financial markets and geoeconomic fragmentation are seen as posing risks to the outlook.

The RBI sees inflation slowing down in the next financial year. Assuming a normal monsoon next year, CPI inflation for 2024-25 is projected at 4.5 per cent. Going forward, the inflation trajectory would be shaped by the evolving food inflation outlook. Rabi sowing has surpassed last year’s level. The usual seasonal correction in vegetable prices is continuing, though unevenly, the statement added.