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Informist, Tuesday, Jul 23, 2024

 

--BUDGET: Global economy still in grip of policy uncertainties 

--High asset prices, political uncertainty pose risks to growth 

--India's econ growth shining exception to global headwinds 

--India's econ growth to continue as shining exception for yrs 

--India's inflation continues to be low, stable 

--India's inflation continues to move towards 4% 

--Core inflation currently at 3.1% 

--Taking steps to ensure supply of perishables to market 

 

NEW DELHI – The Indian economy continues to be an exception while other major economies are struggling with policy uncertainties, Finance Minister Nirmala Sitharaman today said while announcing the Union Budget for 2024-25 (Apr-Mar).

 

"The global economy, while performing better than expected, is still in the grip of policy uncertainties," she said. 

 

As the US struggles for growth with falling labour demand and the Eurozone recovering from a recession, India's growth numbers have held their own. The Economic Survey for 2023-24 (Apr-Mar) has projected India's real GDP growth at 6.5-7.0% for the current financial year started April. GDP growth in recent years has been robust mostly driven by government-led capital expenditure.

 

Sitharaman cautioned on risks arising out of elevated asset prices, political uncertainties, and shipping disruptions that may weigh on growth and support inflation. However, she said India's inflation continues to be low, stable and moving towards the 4% target. CPI inflation has now remained above the Reserve Bank of India's medium-term target of 4.0% for 57 consecutive months. 

 

India's annual inflation rate based on the Consumer Price Index rose to a four-month high of 5.08% in June. Core inflation was at 3.1% for the second consecutive month in June.

 

The Reserve Bank of India has projected CPI inflation to moderate to 3.8% in Jul-Sep, before rising again to 4.6% in Oct-Dec and 4.5% in Jan-Mar. As food inflation continues to pose a risk to India's inflation outlook, the finance minister said that steps are being taken to ensure that supplies of perishable goods reach markets adequately.  

 

With a rate cut in the Eurozone already, and an almost 100% probability of a rate cut by the US Federal Reserve in its September meeting, all eyes will be on the RBI's rate trajectory.  End

 

Reported by Kabir Sharma

Edited by Akul Nishant Akhoury

 

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