New Delhi: According to the Reserve Bank of India’s (RBI) latest bulletin, India’s GDP growth is expected to gain momentum in the third quarter of the fiscal year 2023-24. The report attributes this positive outlook to resilient investment demand, fueled by government infrastructure spending, an increase in private capital expenditure, automation, digitalization, and indigenization.
The bulletin notes a significant improvement in headline inflation, which dropped to 4.9 per cent in October from an average of 6.7 per cent in the fiscal year 2022-23 and 7.1 per cent in July-August 2023. While acknowledging the progress, the report cautions that challenges persist, emphasizing the need for continued efforts.
The combination of monetary policy measures and supply-side interventions played a crucial role in steering inflation down from its elevated levels earlier in the fiscal year. The bulletin highlights November 2022 as the month when headline inflation returned to the RBI’s tolerance band, marking a positive turn in the economic landscape.
The article also observes robust consumer demand for appliances in urban areas, particularly in the mid- and premium segments, reflecting an optimistic consumer sentiment.
India’s external sector is depicted as resilient, maintaining a modest current account deficit (CAD) backed by stable capital flows, a less volatile currency, and ample foreign exchange reserves. The country’s economic growth momentum has surged, propelling GDP beyond pre-pandemic levels and positioning India as the fifth-largest economy globally in terms of market exchange rates.
It’s crucial to note that the monthly State of the Economy article’s authors, including Deputy Governor Michael Patra and other senior officials, express their views in the bulletin, which may not necessarily reflect the official stance of the RBI.