India’s economic growth backed by strong investment demand: RBI Bulletin

At 8.4 percent, the latest quarterly GDP growth rate is the highest in six quarters

The country’s domestic growth activity remains resilient, backed by strong investment demand and upbeat business and consumer sentiments, the Reserve Bank of India (RBI) said in its April 2024 bulletin on April 23.

“Domestic economic activity remains resilient, backed by strong investment demand and upbeat business and consumer sentiments,” it said.

The RBI Bulletin is a monthly publication that offers insights into the developments in domestic and global economies but doesn’t represent the views of the central bank.

Also read: IMF forecasts India will become fourth-largest economy by 2025, third by 2027

The bulletin added that headline inflation has come off the December 2023 peak; however, food price pressures have been interrupting the ongoing disinflation process even as shocks from adverse climate events and geopolitical tensions add uncertainties to the outlook.

“In this environment, the MPC resolved that the path of disinflation needs to be sustained till inflation reaches the 4 percent target on a durable basis. Monetary policy must remain actively disinflationary to ensure anchoring of inflation expectations as price stability sets the foundations for growth,” the bulletin said.

India's gross domestic product (GDP) grew 8.4 percent in the December quarter, data released by the Ministry of Statistics and Programme Implementation on February 29 showed, blowing all expectations out of the water.

The statistics ministry now expects the full-year GDP growth to be even higher than its unexpectedly high first advance estimate of 7.3 percent. The second advance estimates now peg GDP growth at 7.6 percent for 2023-24 even as economists had expected it to be lowered to 6.9 percent.

At 8.4 percent, the latest quarterly GDP growth rate is the highest in six quarters. Last time India's economy grew at a faster rate was in the first quarter of 2022-23, when it grew by 13.1 percent, now revised down to 12.8 percent.