RBI governor Shaktikanta Das optimistic on global economy, dismisses recession concerns at Davos

Reserve Bank of India (RBI) Governor Shaktikanta Das reassured on Thursday that the global recession is unlikely to occur, citing the inherent resilience of individual economies that have weathered pressures from various challenges. Despite concerns arising from the COVID-19 pandemic, the Ukraine war, and spikes in inflation, Das emphasized that the recession has not transpired and is unlikely to do so.

In an interview with Business Today TV on the sidelines of the World Economic Forum (WEF) at Davos, Das highlighted the robustness of both advanced and emerging market economies. While acknowledging a slowdown in growth globally, he pointed out that individual economies have shown resilience.

Addressing inflation, Das noted a global decline, bringing satisfaction to central banks worldwide. However, he acknowledged that some countries are yet to achieve their target rates, presenting challenges in the last mile. Cautious optimism pervades global sentiments amid ongoing geopolitical tensions.

Speaking specifically about India, Das conveyed positive developments. India’s retail inflation has moderated and is within the target zone, reaching 4%. The GDP growth has revived, with an expected 7% in the fiscal year 2024-25, making India’s economic story one of greater resilience than the rest of the world.

Das addressed India’s economic performance in the previous quarter, surpassing expectations with a 7.6% expansion. He mentioned that the momentum of economic activity remains strong, instilling confidence in projecting a growth rate of around 7.3% for the current fiscal year.

Providing insights into inflation trends, Das predicted a continued moderation towards 4%, with an average inflation of 4.5% in the next fiscal year, 2024-25. He highlighted the significant moderation of core inflation to around 3.8% and emphasized the need to carefully monitor food inflation, which is susceptible to external risk factors like supply chain disruptions and weather-related events.