India`s economic growth poised to rebound as domestic demand regains strength: RBI Bulletin
The Reserve Bank of India (RBI) in its article on the ‘State of the Economy’ published in the January Bulletin has said that India’s economic growth is poised to rebound as domestic demand regains strength, though the stickiness in food inflation warrants careful monitoring. It also noted that the economic outlook for 2025 is divergent across countries with some loss of speed in the US; weak-to-modest recoveries in Europe and Japan; more moderate growth profiles in emerging and developing countries alongside a more gradual disinflation relative to advanced economies.
It stated ‘In India, there is a conducive quickening of high-frequency indicators of economic activity in the second half of 2024-25, bearing out the implicit pick-up in real GDP growth for this period in the annual first advance estimates of the NSO.’ It further said the headline inflation eased for the second successive month in December, although the stickiness in food inflation warrants careful monitoring of second order effects.
It mentioned ‘India’s economic growth is poised to rebound as domestic demand regains strength. Rural demand continues to gain momentum, reflecting a resilience in consumption, supported by brighter agricultural prospects.’ A revival in public capex on infrastructure is likely to stimulate growth in key sectors. It also noted that rising input cost pressures in the manufacturing sector, coupled with weather-related exigencies and global headwinds could, however, pose risks to this outlook. The central bank, however, said the views expressed in the Bulletin are of the authors and do not represent the views of the Reserve Bank of India.
