RBI Bulletin Highlights Resilient Rural Consumption & Infrastructure-Led Growth In FY2025
Date
1/18/2025 2:12:17 PM
(MENAFN- KNN India)
New Delhi, Jan 18 (KNN) India's economic growth is set for a significant rebound, driven by strengthening domestic demand and renewed public infrastructure investment, according to an article published in the Reserve bank of India's (RBI) January bulletin.
The assessment, authored by former RBI Deputy Governor Michael Patra and other central bank officials, highlights positive trends while noting potential challenges ahead.
The economic outlook appears particularly promising in rural areas, where consumption patterns demonstrate resilience supported by favorable agricultural prospects.
The article emphasises that public capital expenditure on infrastructure is expected to stimulate growth across key sectors, though it cautions about potential risks from rising manufacturing input costs, weather-related challenges, and global economic headwinds.
High-frequency economic indicators show encouraging momentum in the latter half of fiscal year 2024-25, aligning with the National Statistics Office's (NSO) first advance estimates.
The NSO projects real GDP growth at 6.4 percent for the current financial year, though this represents a four-year low. According to the article's nowcast estimates, third-quarter GDP growth for FY2025 is anticipated at 6.2 percent.
Recent economic indicators suggest strengthening aggregate demand in the third quarter of FY2025. The article notes increased e-way bill volumes on a year-over-year basis in December, accompanied by robust growth in toll collections both in volume and value terms, indicating healthy economic activity.
While the overall outlook is positive, the article, which represents the authors' views rather than the RBI's official stance, emphasises the need for vigilant monitoring of elevated food inflation.
This cautionary note underscores the complex balance between growth momentum and inflationary pressures in India's economic landscape.
(KNN Bureau)
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