Seeking to allay any apprehensions about the economic slowdown, Reserve Bank of India Governor Shaktikanta Das Thursday said there’s no global recession and the domestic economy is resilient. “Despite rising external risks, domestic economy is resilient as foreign debt is only 19.7 per cent of GDP,” Das was quoted as saying by PTI.
Speaking at the Bloomberg India economic summit in Mumbai, Das called for more structural reforms to cushion the economy from rising global headwinds. “The government must front-load budgeted spending as there is little fiscal space for countercyclical measures to boost growth,” he said, adding that he expects US Fed’s latest rate cut to boost fund inflows into the country, but need to be vigilant about the nature of such funds. Furthermore, Das expects inflation will continue to remain below 4% in the next 12 months.
The RBI Governor’s remarks come weeks after data released by the National Statistical Office (NSO) had revealed that the country’s GDP grew at 5 per cent, a 25-quarter low, in the first quarter (April-June) of the current fiscal.
Commenting on the impact of the recent drone attacks on Saudi oil fields which resulted in a fall of oil supply, Das said he expected the crisis to have only limited impact on inflation and the fiscal numbers given lower subsidy outgo.
On Monday, Das in an interview to CNBC-TV18 had said the fall of growth rate to 5 per cent in the first quarter was “a surprise” and that the bank was analysing the reason behind the decline.
“The numbers definitely look much worse because in the first quarter we had projected 5.8 per cent and I think almost everybody had projected not below 5.5 or so. But the number of 5 per cent is a surprise. So we are analysing why exactly it has happened,” he told CNBC-TV18.