Economic Growth Rate Will Be Positive In Next Two Quarters: RBI

 Economic growth rate will be positive in the next two quarters: RBI, Bad days of economy passed.

Like all other countries of the world, covid-19 has badly affected the economy of India but now there are auspicious signs. The Reserve Bank of India (RBI) believes that the worst phase of the economy has passed.

According to RBI, the decline in the economic growth rate in the first two quarters of the current financial year (2020-21) will no longer be repeated.

The rate of economic growth in the last two quarters is expected to remain positive.

RBI Governor Dr. Shaktikanta Das while reviewing the monetary policy on Friday said that the economic growth rate will be 0.1 percent in the October-December quarter and 0.7 percent in the last quarter of January-March.

However, the economic growth rate during the entire financial year will be below 7.5. Earlier the rate of decline was said to be 9.5 percent.

Das said that economic activity so far in the second quarter and the current quarter are showing clear signs that the pace of recovery is better than expected.

Demand is improving in every sector.

The sectors of the economy which were still sluggish are also improving rapidly. However, despite this, the situation is not very pleasant on the inflation front.

In the current third quarter, retail inflation is expected to be 6.8 percent and in the last quarter, it is 5.8 percent. This is more than the 4% fixed for the whole year by both RBI.

In the first six months of the next financial year, inflation is not expected to be below 4 percent.

It also simply means that the process of cheapening of banking loans has been delayed until at least October 2021.

This is also an indication that there may be some increase in interest rates in the next six months.

On Friday, the RBI repo rate (the rate affecting the rate of term loans like home loans, auto loans) has been kept constant at 4 percent.

This is the third consecutive monetary policy review in which there has been no change in the repo rate.