He said that on Thursday, the domestic economy of India continues to exhibit strong momentum on the back of robust investment demand, steady urban consumption, and recovering rural consumption, according to Reserve Bank of India Governor Shaktikanta Das.
Against this background, real GDP growth for 2024-25 is projected at 7.2 per cent, with quarterly growth rates of 7.1 per cent in Q1, 7.2 per cent in Q2, 7.3 per cent in Q3, and 7.2 per cent in Q4.
He further said that the real GDP growth for Q1 of 2025-26 is also expected to be 7.2 per cent.
“After a weak and delayed start, the cumulative southwest monsoon rainfall has picked up with improving spatial spread. By August 7, 2024, it was 7 per cent above the long period average. This has supported kharif sowing, with total area sown as on August 2, being 2.9 per cent higher than a year ago. Industrial output registered an expansion of 5.9 per cent (y-o-y) in May 2024,” he explained.
He further commented that core industries in India recorded a 4.0% rise in June against a rise of 6.4% in May.
Other high-frequency indicators available for June-July 2024 point to growth in the services sector, recovery in private consumption, and evidence of pickup in private investment activity.
Merchandise exports, non-oil non-gold imports, services exports, and services imports all rose during April-June.
Looking ahead, above-normal southwest monsoon prospects by the Indian Meteorological Department, supported by healthy kharif sowing, is likely to support rural demand.
The continuous spell of development in the manufacturing and services sectors speaks of stable urban demand.
High-frequency indicators of investment activity show strong growth in steel consumption, high capacity utilization, good financial health of banks, and corporations and a sustained interest of the government in infrastructure spending augurs well.
External demand could also get a boost from the improvement in prospects for global trade, he added.
Geopolitical tensions, fluctuations in international commodity prices, and geoeconomic fragmentation are some of the risks to the outlook, said Das.
The global economic outlook, though resilient, is likely to slow down a bit. Declining inflation in major economies but persisting pressure in services, said RBI Governor.
International prices of food, energy, and base metals have eased in recent weeks compared to the time of their last policy meeting.
Central banks are therefore adopting various policy stances against differing growth and inflation prospects, which is imparting volatility to financial markets.
He further added that in the wake of recent global equity sell-offs, the dollar index has weakened, sovereign bond yields dropped by a significant amount, and gold prices surged to all-time highs.
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