The Reserve Bank of India (RBI) on Wednesday projected that the country’s economy will grow at 7.2 per cent in the Financial Year 2022-23. The central bank has increased its inflation forecast to 6.7 per cent for the current fiscal year.

The RBI has kept the real gross domestic product (GDP) growth forecast for Financial Year 2022-23 at 7.2 per cent. India’s GDP is likely to grow at 16.2 per cent in quarter 1 of FY 2022-23 (April-June), 6.2 per cent in quarter 2 (July-September), 4.1 per cent in quarter 3 (October-December) and 4 per cent in quarter 4 (January-March).

Meanwhile, RBI has raised its inflation forecast to 6.7 per cent for the financial year 2022-23 from an earlier estimate of 5.7 per cent. Consumer Price Index (CPI) based inflation, which the RBI factors in while arriving at its monetary policy, galloped for the seventh straight month to touch an 8-year high of 7.79 per cent in April.

The RBI raised the interest rate by 50 basis points to a two-year high of 4.9 per cent as it doubled down to tame inflation that has surged in the last couple of months. All the six members of the Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, unanimously voted for the latest rate hike.

The rate hike comes on the back of a 40 bps increase effected by the RBI at an unscheduled meeting on May 4.