The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) on June 6 cut its Gross Domestic Product (GDP) growth forecast for FY20 to 7 percent from what was previously projected 7.2 percent.
Earlier this year, in its April meet, the RBI had cut its growth forecast for the current fiscal to 7.2 amidst signs of weakening domestic investment activity as reflected in a slowdown in production and imports of capital goods.
For the first half of FY20, the GDP growth is seen at 6.4-6.7 percent, down from the previous projection of 6.8-7.1 percent.
The GDP growth forecast for the second half of the financial year has been revised to 7.2-7.5 percent from 7.3-7.4 percent projected earlier.
RBI’s MPC on June 6 delivered a third consecutive rate cut in five months in an effort to boost credit growth and revive the sluggish economic activity in the country.
The six-member committee voted in favour of an aggressive 25 basis points reduction in the key policy rate. One basis point is a hundredth of a percentage point. The RBI cut its key rates by 25 basis points, bringing the repo rate down to 5.75 percent from 6 percent.