Reserve Bank of India (RBI) cuts India Growth Forecast (GDP) to 5.5 Percent.
Reserve Bank of India (RBI), the central banking institution of India, on July 30, 2013 lowered the Gross Domestic Product (GDP) growth projection for the current financial year 2013-14 to 5.5 per cent from earlier projected 5.7 per cent, said the external sector is the “biggest threat” to economic stability.
It also said that the recent liquidity tightening measures, taken to support the rupee, will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling it to revert to the policy of supporting growth with continuing vigil on inflation.
India grew at 5 percent in the fiscal year that ended in March, its weakest in a decade, which had prompted the RBI to cut rates by 125 basis points since last year, although it paused in June amid worries of high consumer price inflation.
It said it aims to keep headline wholesale price index inflation at around 5 percent by the end of the fiscal year in March and 3 percent over the medium term. Annual wholesale inflation rose slightly to about 4.9 percent in June.