The Reserve Bank of India's November Bulletin provides an optimistic view of India's economic momentum, projecting an upswing in GDP growth for Q3:2023-24, largely attributed to robust festival demand and resilient investment trends. The bulletin acknowledges the global economic slowdown while highlighting the domestic factors driving growth.
The report indicates a sequential rise in India's GDP growth for the mentioned quarter, buoyed by sustained festival-related consumer demand. It underscores the resilience of investment demand, citing government infrastructure spending, increased private capital expenditure, and advancements in automation, digitalization, and indigenization as key contributing factors.
Notably, headline inflation has decreased to 4.9% in October from the elevated levels observed in the previous fiscal year and earlier in 2023. The article highlights a notable decline from the average of 6.7% in 2022-23 and 7.1% in July-August 2023, attributing this improvement to a combination of monetary policy measures and supply-side interventions.
While acknowledging this positive trend in inflation, the article remains cautious, indicating the need for continued vigilance. It emphasizes that although the recent readings are a relief from previous highs, sustained efforts are required for long-term stabilization.
The bulletin further mentions upbeat consumer sentiment, particularly in urban areas, with strong demand for consumer appliances in the mid- and premium segments. It also emphasizes India's resilient external sector, featuring a manageable current account deficit, steady capital flows, a stable currency, and healthy foreign exchange reserves.
The authors, including Deputy Governor Michael Patra and other senior officials, underline the significant rebound in GDP, positioning India as the world's fifth-largest economy by market exchange rates, surpassing pre-pandemic levels.
However, it's important to note that the views expressed in the bulletin represent the authors' perspectives and may not necessarily align with the RBI's official stance.
(With Agency Inputs)
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