RBI Monthly Bulletin: Growing Optimism That India On The Cusp Of Long-Awaited Economic Take-Off
There is a growing optimism that India is on the cusp of a long-awaited economic take-off, the Reserve Bank of India said in its monthly bulletin on Tuesday.
Recent indicators are pointing to a quickening of the momentum of aggregate demand, the bulletin stated. According to the economic activity index, activity rebounded in April and early estimates suggest that GDP growth for first quarter of the ongoing fiscal 2024-25 is likely to remain close to 7.5%.
Non-food spending is being pushed up by the green shoots of rural spending recovery, the central bank affirmed. A modest easing of headline inflation in the reading for April 2024 confirms the expectation that an uneven and lagged pace of alignment with the target is underway.
Low summer/pre-monsoon rainfall, higher than normal maximum temperatures and heatwave days in summer season, however, continue to remain as major risk factors.
Amidst resilient domestic activity, the outlook for the global economy is turning fragile as the descent of inflation is stalling, re-igniting risks to global financial stability, the central bank cautioned. Capital flows have become volatile as nervous investors turn risk averse, it added.
