A recent bulletin by the Reserve Bank of India highlighted the moderation of retail inflation as a result of monetary policy actions and supply side interventions. The bulletin mentioned that while the global economy is slowing down due to manufacturing and declining services sector activity, India’s GDP momentum is expected to increase in the upcoming quarter.
The bulletin, authored by a team led by RBI Deputy Governor Michael Debabrata Patra, also noted the resilience of investment demand in India, driven by government infrastructure spending and an uptick in private capital expenditure. It further discussed the decline in headline inflation based on the Consumer Price Index, attributing it to monetary policy and supply side interventions.
The RBI emphasized that the views expressed in the article do not necessarily represent the views of the central bank. Furthermore, the article highlighted India’s viable external sector, modest Current Account Deficit (CAD), and healthy foreign exchange reserves.
The growth momentum in India has surpassed pre-pandemic levels, with the country becoming the fifth largest economy in the world at market exchange rates. The article also praised steadfast policy initiatives for contributing to the soundness of the financial sector and the credit needs of the resurgent economy.
This bulletin marks the 37th edition of the State of the Economy article, showcasing the strong revival of the Indian economy after a 25-year hiatus. Overall, the bulletin provides an optimistic outlook for India’s economic recovery, highlighting the positive trends in various sectors.
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