India (Common Wealth) _ India’s growth momentum “is likely to be sustained in 2023–2024 in an environment of easing inflationary pressures,” according to the Reserve Bank of India (RBI).
The momentum is likely to be maintained in 2023–2024, according to the RBI, thanks to sound macroeconomic policies, lower commodity prices, a strong financial sector, a thriving corporate sector, continued fiscal policy emphasis on the quality of public spending, and fresh growth opportunities resulting from supply chain realignment across the globe.
However, the central bank warned that slower global growth, ongoing geopolitical tensions, and a potential increase in financial market volatility as a result of fresh stress events in the global financial system might have negative effects due to growth-related hazards. Therefore, in order to increase India’s potential for medium-term growth, structural changes must be maintained.
“Global growth is anticipated to slow down in 2023 and may be moderate for the foreseeable future. According to the IMF’s World Economic Outlook, which was published in April 2023, the world’s 2.8% growth in 2023 is anticipated to be followed by a medium-term growth plateau at 3%, the central bank noted.
The central bank stated that overall disinflationary efforts are anticipated to reduce headline inflation from 7.3% to 4.7% in 2023 among advanced economies (AEs) and from 9.8% to 8.6% in emerging market and developing economies (EMDEs), but added that progress was likely to be gradual.
The paper stated that without an El Nino event, a steady currency rate and a typical monsoon are projected to cause inflation to decline throughout the years 2023–24, with headline inflation easing down to 5.2% from the average level of 6.7% seen last year.
According to the RBI’s research, households’ expenditure on non-essential items is anticipated to increase in the coming year. Manufacturing firms are expressing optimism over production, order books, employment circumstances, and capacity utilization for the second and third quarters of FY24, according to the 101st round of the quarterly industrial outlook survey.
