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Informist, Thursday, Aug 8, 2024

MUMBAI - Following are the excerpts on growth from the Reserve Bank of India's third bi-monthly meeting of the Monetary Policy Committee for 2024-25 (Apr-Mar) that was detailed today:

The global economic outlook remains resilient although with some moderation in pace. Domestic economic activity continues to sustain its momentum. After a weak and delayed start, the cumulative southwest monsoon rainfall has picked up with improving spatial spread. By Wednesday, it was 7% above the long period average. This has supported kharif sowing, with the total area sown as of Friday being 2.9% higher than a year ago.

Industrial output registered an expansion of 5.9% on year in May. Core industries rose 4.0% in June, against 6.4% in May. Other high frequency indicators released during June-July (2024) indicate expansion of services sector activity, ongoing revival of private consumption, and signs of pickup in private investment activity. Merchandise exports, non-oil non-gold imports, services exports, and imports expanded during April-June.

Going forward, the India Meteorological Department's projection of above normal south-west monsoon and healthy kharif sowing will support improving rural demand. The sustained momentum in manufacturing and services suggests steady urban demand. High frequency indicators of investment activity, as evident in strong expansion in steel consumption, high capacity utilisation, healthy balance sheets of banks and corporates, and the government’s continued thrust on infrastructure spending, point to a robust outlook.

Improving world trade prospects could support external demand. Headwinds from geopolitical tensions, volatility in international commodity prices and geo-economic fragmentation, however, pose risks to the outlook. Taking all these factors into consideration, real GDP growth for 2024-25 (Apr-Mar) is projected at 7.2% with Apr-Jun at 7.1%, Jul-Sep at 7.2, Oct-Dec at 7.3% and Dec-Mar at 7.2%. Real GDP growth for Apr-Jun 2025 is projected at 7.2%. The risks are evenly balanced.  End

Compiled by Sourabh Kumar

Filed by Manisha Baxla

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