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RBI on expected lines keep repo rate unchanged and cut CRR rate by 50 bps

ICICIdirect Research 06 Dec 2024 DISCLAIMER

RBI raised its inflation forecast across periods by around 30 bps. Full year FY25 is now projected at 4.8% versus 4.5% earlier. Q3 is now projected at 5.7% vs 4.8% earlier while Q4 is now estimated at 4.5% Vs 4.2%. Similarly, Q1 and Q2 FY26 is now projected at 4.6% versus earlier estimate of 4.3%. However, the comforting part is that Q2FY26 inflation is projected at 4.0%.

Similarly, GDP growth for FY25 is now projected at 6.6% vs earlier projection at 7.2%. Q3FY25 growth is revised down by 50 bps at 6.8% vs 7.3%. However, Q4FY25 growth projection remain unchanged at 7.2% earlier which indicates that RBI expects sharp rebound in growth in Q4FY25. 

RBI still seems far above consensus growth expectation (market expectation for Q4 growth at <7.0% and FY25 at 6.5%)

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