Governor Sanjay Malhotra discussed a number of important topics during his announcement of the RBI’s policy decisions on Wednesday, including inflation, India’s GDP growth, and the effect of reciprocal tariffs imposed by the US on domestic commerce.
With a benign inflation outlook (down from 4.2% to 4%), the Reserve Bank of India lowered its benchmark policy rate by 25 basis points to 6%, its second rate drop this year. However, the central bank reduced its prediction of India’s GDP growth for this fiscal year from 6.7% to 6.5%.
In addition to announcing the choices on Wednesday, RBI governor Sanjay Malhotra stated that India was in a better position to deal with retaliatory tariffs imposed by US President Donald Trump since its domestic economy was less dependent on US exports than other countries.
Here are Malhotra’s responses on some key issues:
Regarding GDP growth, inflation, and Trump tariffs
The majority of current projections for the pace of growth of the global GDP have decreased by at least 20 to 30 basis points (bps). Not just for this year, but even for the following one.
Globally, opinions on inflation are also divided. Because of the tariffs they will be applying, it is predicted to increase, particularly for the US. We have provided our assessment for India. This year, we have lowered the growth rate by 20 basis points, mostly due to uncertainty.
