Q2 growth could surprise everyone: Das

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The Reserve Bank of India (RBI) Governor Shaktikanta Das said on Tuesday that the country’s economic growth remains strong and the gross domestic product (GDP) figures in the second quarter will surprise everyone. Speaking at an event in Mumbai, Das said inflation is the RBI’s first priority at this time.

“Looking at the pace of economic activity and data from some early indicators, I can say that the second quarter GDP data to be released at the end of November will surprise everyone,” Das said. He said that RBI estimates that the real GDP growth rate in the second quarter of the current financial year will be 6.4 percent. Das said geopolitical uncertainties are the biggest risk to global growth at the moment, but compared to other countries, India is in a better position to handle it. The RBI Governor said that while formulating monetary policy, rates and other international factors are taken into account in developed countries but ultimately the monetary policy is decided by the domestic factors of inflation and growth. “Our monetary policy is not influenced by what is the difference in bond yields (between India and the US) or whether the currency is depreciating or not,” Das said. Asked about India’s inclusion in JP Morgan global bond indices, Das said there were both positives and negatives associated with it. But he also said that there is no possibility of any major instability in the financial markets.

Speaking on the private banks, Das said some private sector banks are seeing high attrition and the situation is being watched closely by the central bank.

He said RBI is looking at the issue as part of the regulatory supervision efforts. In the comments that come amid some major banks reporting attrition rates of over 30 per cent, Das said every bank has to build a core team to take care of such issues. He also said that the career outlook of youngsters has changed with regard to job switching and added that the youth is “thinking differently” on the aspect now. According to Das, the growth momentum in the economy continues to be strong, and that the GDP number for the second quarter will surprise everyone on the upside. He said that geopolitical uncertainty is the biggest risk to global growth but was quick to add that India is better placed to deal with any potentially risky situation.

(With inputs from PTI)