RBI's statement on the country's growth rate

India's growth momentum is likely to be sustained in 2023-24 on the back of strong macroeconomic policies and softening commodity prices. The Reserve Bank of India said this in its annual report released on Tuesday. The central bank said that inflation is also expected to decrease in the current financial year. However, the report also said that if there is volatility in the financial market due to slow global growth, long-term geopolitical tensions and recent incidents of pressure in the global financial system, it can pose downside risks to growth.

"India's growth momentum is expected to be sustained in 2023-24 on the back of strong macroeconomic policies, softening of commodity prices, strong financial sector, healthy corporate sector, continued emphasis on quality of government expenditure, restructuring of global supply chains and moderation on inflation," the RBI said.

The RBI's annual report for 2022-23 further said that its monetary policy is to ensure that inflation continues to close to the set target while supporting growth. The RBI's annual report is a statutory report of its central board of directors.

"With a stable exchange rate and a normal monsoon, if the El Nino event does not occur, inflation is expected to go down in 2023-24. Wholesale inflation is expected to come down to less than 5.2 per cent from 6.7 per cent in the last financial year.

On the external sector, the central bank said the current account deficit (CAD) is expected to remain limited due to strong exports of services and softening of prices of imported goods.

"Foreign portfolio investment (FPI) flows are likely to remain volatile due to persistence of global uncertainties," the RBI said, adding that it will expand pilot projects of central bank digital currency (CBDC) operating at retail and wholesale levels.