India’s Central Bank Governor Sees Better 2025 Growth Prospects

Mumbai: So, the new central bank governor of India, Sanjay Malhotra, is feeling pretty optimistic about the economy. He recently shared that he expects things to pick up in 2025, thanks to strong consumer and business confidence. This is his first public take on the growth outlook since stepping into his role earlier this month.

In a report, he mentioned that after a bit of a slowdown in the first half of 2024-25, the economy should bounce back. He pointed out that both consumer and business confidence are looking good for the year ahead. Plus, companies are entering 2025 with solid balance sheets and profits, which is a great sign.

Malhotra, who was a bit of a surprise pick for the job, emphasized the importance of stability and growth. However, he didn’t dive into specifics about future monetary policy moves. The previous governor, Shaktikanta Das, kept interest rates steady for nearly two years, even with calls to lower them. Now, folks are thinking Malhotra might cut rates as soon as February.

Recently, the economy grew at its slowest pace in almost two years, leading analysts to lower growth expectations for the current fiscal year to around 6.5%. But the RBI believes that growth will recover in the latter half of the year, thanks to increased public spending, investment, and strong service exports.

On a global scale, Malhotra sees a brighter picture due to easing inflation, which could create more room for supportive monetary policies. However, he also warned that challenges remain, like geopolitical tensions and climate issues.

He reassured that the RBI is focused on maintaining financial stability to help the economy grow. The financial sector is in good shape, with strong earnings and solid capital buffers. But there are concerns about rising bad loans, which could pose challenges for banks if the economy weakens.