"Prospects of a pick-up in real GDP growth in the second half of 2013-14 have been dampened by negative growth in industrial production over two consecutive months," the RBI said in the Macroeconomic and Monetary Developments report released along with the third quarter monetary policy review.
The economic growth, it said, could be "somewhat lower than the central estimate of 5 per cent”.
In the first half of 2013-14, the GDP growth was at 4.6 per cent.
For fiscal 2014-15, there is a case for gradual recovery to the 5-6 per cent band, the RBI said, giving a central estimate of 5.5 per cent growth.
The central bank further said if the nearly 130 projects worth over Rs 4 lakh crore cleared by the Cabinet Committee on Investments translate into investments, global growth improves and inflation softens, the country's GDP growth could come in at "the higher reaches" of the forecast range of 5-6 per cent.
On the inflation front, the report said retail inflation, which stood at 9.52 per cent for December, is likely to soften further in the January-March quarter on seasonal softening in fruit and vegetable prices.
For the fourth quarter, the headline CPI inflation is expected to range between 7.5 and 8.5 per cent with an upside risk, it added.