By TIOL News Service

NEW DELHI, FEB 05, 2021: IN its first monetary policy announcement post the budget presentation, the Reserve Bank of India (RBI) on Friday said it estimates the country's real Gross Domestic Product (GDP) to grow 10.5 per cent in the financial year 2021-22.

"The Union Budget 2021-22, with its thrust on sectors such as health and well-being, infrastructure, innovation and research, among others, should help accelerate the growth momentum," said an official statement.

Taking these factors into consideration, real GDP growth is projected at 10.5 per cent in 2021-22 - in the range of 26.2 to 8.3 per cent in April-September and 6 per cent in the third quarter.

The bank predicts rural demand to remain resilient on good prospects of agriculture, while urban demand and demand for contact-intensive services is expected to strengthen with the substantial fall in COVID-19 cases and the spread of vaccination.

"Consumer confidence is reviving, and business expectations of manufacturing, services and infrastructure remain upbeat," it said.

The Central bank also said it has decided to continue with an accommodative stance of monetary policy till the "prospects of a sustained economic recovery are well secured" and may continue into the next year.

"Growth is recovering, and the outlook has improved significantly with the rollout of the vaccine programme in the country. The Union Budget 2021-22 has introduced several measures to provide an impetus to growth," it said.

The central bank also kept repo rate unchanged at 4 per cent for the fourth time in a row, while the reverse repo rate was also untouched at 3.35 per cent.

The Marginal Standing Facility (MSF) rate and bank rate remain unchanged at 4.25 per cent.

RBI also revised Consumer Price Index (CPI) inflation to 5.2 per cent in the fourth quarter of the ongoing financial year, set to revise further to 5.2 to 5 per cent in the first half of FY22.