IANS | 19 Mar, 2024
The high visibility of structural demand and healthier corporate and
bank balance sheets are likely to propel India’s growth going forward
even as the global economy is losing steam, according to the RBI’s
monthly bulletin released on Tuesday.
The report states that high-frequency indicators point to a
further levelling of growth in the global economy in the period going
ahead.
While business activity is showing some slender
improvement in both advanced and emerging economies, external demand
remains subdued amidst country-specific weaknesses, including in the
property sector, and spiralling public debt.
Labour markets
remain resilient but are showing signs of easing, especially in terms of
wage increases. However, in some Emerging Market Economies (EMEs),
unemployment rates are edging up, the report adds.
In India, real
GDP growth was at a six-quarter high in Q3:2023-24, powered by strong
momentum, robust indirect taxes, and lower subsidies, the RBI bulletin
states. However, there is a word of caution over inflation.
“Even
as inflation is on the ebb with broad-based softening of core
inflation, the repetitive incidence of short amplitude food price
pressures deters a swifter fall in headline inflation towards the target
of 4 per cent,” the bulletin states.
This would imply that the RBI will not be in a position to reduce key interest rates to back fiscal policy in spurring growth.
Another
article in the RBI bulletin which talks of seasonal factors in the
Indian economy, states that the consumer price index (CPI) witnesses
price pressure during the monsoon season, driven by vegetable prices
while fruit prices peak during the summer months.
Compared to the
pre-COVID period, seasonal variation has also increased for cash in hand
and balances with RBI, production of primary goods, consumer goods,
textiles, petroleum products, electricity production, passenger vehicle
sales and merchandise exports, it adds
