Rural Growth, Govt Spending To Drive India's Economy In H2FY25: ICICI Bank
Date
11/14/2024 2:09:53 PM
(MENAFN- KNN India)
New Delhi, Nov 14 (KNN)
India's economic growth in the latter half of the fiscal year 2024-25 is expected to be primarily driven by rural demand and government expenditure, according to a recent report by ICICI Bank.
The analysis highlights an emerging momentum in the rural economy, complemented by the government's sustained focus on infrastructure development and welfare initiatives.
The manufacturing sector has shown encouraging signs, with 19 out of 23 sub-sectors registering growth, marking a significant improvement from the previous month's figure of 12.
Notable expansion has been observed in electrical equipment, transport equipment, furniture, and rubber and plastics manufacturing, indicating a broad-based recovery in the sector.
Consumer durables have demonstrated particular resilience, recording a 6.5 percent year-on-year growth in September.
Following three months of decline, consumer non-durables witnessed a modest recovery with 2 percent growth, primarily attributed to increasing rural demand.
This upturn in non-durables is especially significant as it reflects strengthening consumption patterns in rural areas and their positive impact on the fast-moving consumer goods (FMCG) sector.
However, the overall industrial growth has shown signs of moderation. The Index of Industrial Production (IIP) registered a growth of 2.6 percent year-on-year in the second quarter of FY25, considerably lower than the previous quarter's 6.9 percent and the robust 7.8 percent recorded in Q2FY24.
The cumulative IIP growth for the first half of FY25 stands at 4.0 percent, down from 6.2 percent in the corresponding period last year.
Despite the deceleration in industrial growth, the outlook remains positive, with rural demand and government spending expected to be key growth catalysts in the coming months.
These factors will be crucial in determining India's economic trajectory for the remainder of the fiscal year 2024-25.
(KNN Bureau)
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