Not out of the woods yet, have miles to go, says RBI

The Indian economy is “not out of the woods yet and we have miles to go”, but inflation of around 5% and 4.9% in September and October, respectively, is a “welcome relief” from the average of 6.7% in 2022-23 and 7.1% in July-August 2023, said the RBI’s monthly bulletin

The RBI’s Monetary Policy Committee (MPC) has decided unanimously to keep the policy repo rate unchanged at 6.5 per cent for the third time in a row.

India Business News: The Indian economy is expected to achieve a growth rate of 7% in fiscal year 2025, following consistent growth of 7% or above in the preceding years,

Indian Consumers: While the affluent segment gravitated toward luxury apartments, high-end cars, and premium consumer goods, lower-income brackets grappled with inflation and rural hardships. Sales surged for luxury items, bustling malls and restaurants, alongside a spike in hotel room rates due to heightened demand. Conversely, FMCG companies faced stagnation in selling everyday items like biscuits, soaps, shampoos, and perfumes, yearning for increased consumption rates.

The rating agency also revised the 2025 forecast upwards to 6.4% in its Global Macro Outlook 2024-25 from 6.3% projected in November 2023, projecting India to be the fastest-growing economy over the next two years.

The RBI said if services exports maintain their recent high momentum, the drag from net external demand should moderate through April-June 2023.

The State of the Economy report of the central bank said that inflation needs to align with the target by the second quarter of the year and get anchored there to achieve 7% GDP growth in FY25. RBI in its December 2023 policy projected inflation measured by Consumer Price Index to be at 4% in the second quarter FY25.

Indian economy should record a growth rate of 7% in the next fiscal and inflation is likely to ease further, RBI Governor Shaktikanta Das said on...

The Reserve Bank of India forecasts a potential slowdown in the domestic FMCG sector in the next six months but highlights robust demand for premium consumer businesses. Despite the festival season, private final consumption expenditure remains low, and government consumption contracts. Capacity utilization across sectors prompts the need for new investments.

The Reserve Bank of India, in its monthly bulletin, highlighted India's imminent economic upturn, noting international recognition and anticipation of poverty eradication. The central bank emphasized growing optimism globally and cited commendation from external agencies like the International Monetary Fund for India's significant strides in reducing poverty.