RBI Governor Shaktikanta Das stated on Thursday that India’s domestic economic activity is still gaining momentum due to the country’s strong investment demand, stable urban consumption, and growing rural consumption.
Considering all the variables, the real GDP growth of the nation is estimated for 2024–25 to be 7.2%, with 7.1% growth in Q1, 7.2% growth in Q2, 7.3% increase in Q3, and 7.2% growth in Q4.
According to the RBI chief, real GDP growth for Q1:2025-26 is anticipated to be 7.2%.
“The cumulative southwest monsoon rainfall has improved in spatial distribution after a weak and delayed start.
It was 7% higher than the long-term average on August 7, 2024. This has helped with kharif sowing; as of August 2, the total area sown was 2.9% more than it was a year earlier. In May 2024, the industrial output increased by 5.9% (year over year), he said.
He also mentioned that, in contrast to May, when they increased by 6.4%, June saw a 4.0% increase in the nation’s main industries.
Additional high frequency indicators that were made public in June and July of 2024 show hints of a recovery in the private investment sector, continued growth in the services sector, and continuous private consumption revival.
From April to June, there was an increase in services exports and imports, non-oil non-gold imports, and merchandise exports.
The Indian Meteorological Department’s (IMD) forecast for a good kharif sowing and an above average southwest monsoon in the future will help to improve rural demand.
Consistent urban demand is suggested by the industrial and services sectors’ persistent momentum.
A positive picture is suggested by high frequency indicators of investment activity, which are demonstrated by the robust growth in steel consumption, high capacity utilisation, strong bank and business balance sheets, and the government’s ongoing push for infrastructure development.
Das continued, “Improving prospects for global trade may help sustain external demand.”
Das did, however, also note that there are risks to the outlook due to geopolitical tensions, fluctuations in global commodity prices, and geoeconomic fragmentation.
The governor of the RBI stated that despite some slowing down, the outlook for the world economy is still strong.
Major economies are seeing a decline in inflation, but inflation in service prices is still present.
Since the last policy meeting, the price of food, energy, and base metals has decreased internationally.
Central banks are taking different approaches to policy due to differing growth-inflation predictions. Financial markets are becoming volatile as a result of this.
He said that in the midst of recent global equity sell-offs, the dollar index has declined, sovereign bond rates have drastically decreased, and gold prices have surged to all-time highs.
