The Reserve Bank of India (RBI) highlighted a comprehensive overview of India’s economic landscape, emphasising both positive developments and persistent challenges. Despite a welcome reduction in inflation, the RBI stresses that the nation remains in a challenging economic terrain, with global financial conditions posing a significant risk. Anticipating a boost in GDP growth in Q3, 2023-24, driven by festive demand, the RBI underscores the need for cautious monitoring
The positive momentum in growth, propelling India to the fifth-largest global economy, is attributed to consistent policy initiatives. The RBI emphasises the imperative of sustained policy vigilance to fortify India’s economic resilience in the face of ongoing risks.
Image source: PTI
The Reserve Bank of India (RBI) recently released its monthly bulletin, offering valuable insights into the nation’s economic standing. Despite positive strides, the report emphasises that challenges persist, demanding continued attention.
The RBI said in its ‘State of the Economy’ article in the bulletin, “We are not out of the woods yet and have miles to go, but (inflation) readings of around 5% and 4.9% in September and October, respectively, are a welcome relief from the average of 6.7% in 2022-23 and 7.1% in July-August 2023.”
The bulletin highlighted that global economic conditions getting stricter could be a big risk in the future. In India, the RBI anticipated that there would be a noticeable increase in the GDP growth momentum in Q3 of 2023-24, mainly due to festive demand being high during that period. However, the emphasis is on cautious monitoring of the evolving situation.
The RBI recognises the positive impact of calibrated measures, such as the normalisation of surplus liquidity and robust credit growth. However, it notes that the complete transmission of these measures is a work in progress. Some other key factors are as follows:
A notable point in the RBI bulletin is the positive momentum in growth, propelling India’s GDP above pre-pandemic levels. The nation now holds the fifth-largest economic position globally at market exchange rates. The report attributes this success to consistent policy initiatives, underscoring the financial sector’s strength.
While celebrating reduced inflation and regained growth momentum, caution prevails due to ongoing risks. As India addresses these economic challenges, the report emphasises the importance of sustained policy vigilance and strategic interventions to fortify and enhance the nation’s economic resilience.
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