Reserve Bank of India in its monthly bulletin said that India’s growth trajectory is poised to lift in the second half of 2024-25, driven mainly by resilient domestic private consumption demand.
“India’s growth trajectory is poised to lift in the second half of 2024-25, driven mainly by resilient domestic private consumption demand. Supported by record level foodgrains production, rural demand, in particular, is gaining momentum,” said the RBI in the bulletin.
Additionally, RBI further explained that sustained government spending on infrastructure is expected to further stimulate economic activity and investment. However, global headwinds pose risks to the evolving outlook for growth and inflation, said the RBI.
Further, the central bank said that high frequency indicators (HFIs) for the third quarter of 2024-25 indicate that the Indian economy is recovering from the slowdown in momentum witnessed in Q2, driven by strong festival activity and a sustained upswing in rural demand. The prospects for agriculture and hence rural consumption are looking up with brisk expansion of rabi sowing.
The RBI said that expectations around India’s resilient growth trajectory going forward are also coalescing with a more sustainable underpinnings in view of positive climate action, with increased policy focus on renewable energy, electric vehicles (EVs), green hydrogen, and steps towards institutionalizing the carbon market.
(more to come)
