Mumbai (Maharashtra) [India], November 20 : The weakness witnessed in the Indian economy, particularly in the recent quarter, is behind us, said the RBI's November bulletin released on Wednesday.
The slack in speed in the Indian economy observed in the second quarter of 2024-25 (July-September) is behind us as private consumption is back to being the driver of domestic demand with festival spending lighting up real activity in October-December, RBI said in its article titled 'State of the economy'.
Indian economy grew 6.7 per cent in the April-June quarter, lower than RBI's 7.1 per cent forecast. GDP data for July-September quarter is due at 4 pm on November 29.
"Private consumption is back to being the driver of domestic demand, although with mixed fortunes. Festival spending has lighted up real activity in the third quarter," said the RBI bulletin.
Footfalls in malls may be low but e-commerce is burgeoning with a variety of marketing strategies and brand recall initiatives to catch the attention of the young generation.
"Rural India is emerging as a gold mine for e-commerce companies in this festival season; this is expected to gather further momentum with the sharp increase in kharif output and optimism around rabi production emboldening a record foodgrains target for 2024-25," the RBI said.
Domestic financial markets are seeing corrections with relentless hardening of the US dollar and equities being under pressure from persistent foreign portfolio outflows.
The RBI asserted that the medium-term outlook remains bullish as the innate strength of the macro-fundamentals reasserts itself.
The RBI bulletin also mentioned about the elevated inflation. Headline consumer price index (CPI) inflation rose above the upper tolerance band in October 2024, with a sharp surge in the momentum of food prices.
The RBI has pegged India's 2024-25 GDP growth at 7.2 per cent. IMF and World have pegged it at 7.0 per cent. Many global rating agencies and multilateral organizations have also revised their growth forecasts for India upwards.
The Economic Survey tabled in Parliament earlier this year "conservatively" projected India's real GDP growth at 6.5-7 per cent for 2024-25, acknowledging that market expectations are higher. Real GDP growth is the reported economic growth adjusted for inflation.
India's GDP grew by an impressive 8.2 per cent during the financial year 2023-24, continuing to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.
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