India’s GDP to contract by 9.5% in current financial year: RBI

The Reserve Bank of India today said that the country's real GDP would contract by 9.5 percent in the 2020-21 financial year, and decided to keep benchmark interest rate unchanged at four percent.

It, however, indicated an accommodative stance, implying more rate cuts in the future to prop up an economy hit by the Covid-19 crisis, reports our New Delhi correspondent.

RBI Governor Shaktikanta Das said GDP growth may break out of contraction and enter positive zone by the fourth quarter of the current fiscal year (January to March of 2021).

Das made the remarks while announcing the decisions taken by the RBI's Monetary Policy Committee (MPC).

He said MPC voted for keeping interest rate unchanged and continued with its accommodative stance to support growth.

RBI had last revised its policy rate on May 22, in an off-policy cycle to boost demand by cutting interest rate to a historic low.

Das said the Indian economy is entering a "decisive phase" in the fight against coronavirus.