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India central bank projects economy to shrink at 7.5% pace

RBI upgrades negative forecast by 2 percentage points as rural demand picks up

Shaktikanta Das, the Reserve Bank of India governor, projects retail inflation of 6.8% for the October-December quarter and 5.8% for January-March.   © Reuters

NEW DELHI -- India's economy is projected to shrink 7.5% in the current fiscal year through March, its central bank governor said on Friday, upwardly revising an October forecast for a 9.5% contraction.

The economy "is recuperating faster than anticipated," Reserve Bank of India Gov. Shaktikanta Das said after the bank's Monetary Policy Committee meeting. The second half of the ongoing fiscal year "is expected to show positive growth," 0.1% on the year in the October-December quarter and 0.7% in January-March, he added.

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