RBI MPC Meeting 2024: Pre-Mature To Talk About US Recession, RBI Governor Shaktikanta Das

It is difficult to predict the possibility of a slowdown or recession based on one-month data, RBI Governor Shaktikanta Das said after last week's US unemployment date sparked fears of a recession in the world's largest economy.

The overall economic growth of the US, according to Das, has remained strong, emphasising that the second quarter growth numbers were higher as compared to the first quarter. “At this point, it's premature to talk about a recession in the US.”  

Employers in the US added just 1,14,000 jobs in July, 35% fewer than expectations of 1,75,000, and unemployment, now at 4.3%, is the highest since October 2021, the Labour Department reported Friday. The unemployment rate surpasses economists' predictions to remain steady at 4.1% for the month.

Das mentioned that the RBI will be watchful about the relevant data coming from both domestic and external sources and address any emerging issues. International agencies like the International Monetary Fund, among others, have projected world trade to grow by 3% this year, he said. “This would support the overall external demand situation.”

On Thursday, the RBI kept the repo rate unchanged at 6.5% for the ninth straight time. He remains cautious on inflation due to higher food inflation.

After the review, the MPC decided the following on lending rates:

• To keep the repo rate unchanged at 6.5% with a 4:2 majority. Ashima Goyal and Jayanth R. Varma voted to reduce the policy repo rate by 25 basis points.

• The standing deposit facility rate, pegged 25 basis points below the repo rate, is at 6.25%.

• The marginal standing facility rate, which is 25 basis points above the repo rate, is 6.75%