The Reserve Bank of India has forecast a rebound in India’s growth in the second half of FY25, propelled by strong rural demand, a historic level of foodgrain production and various other factors. According to the central bank’s monthly bulletin, continued government investment in infrastructure is expected to boost economic activity and encourage investment. Nonetheless, potential global challenges could pose risks to the growth and inflation outlook.
The RBI said: “India’s growth trajectory is poised to accelerate in the second half of 2024-25, driven primarily by resilience in domestic private consumption demand. Supported by a record level of food grain production, rural demand, in particular, is gaining momentum.
The December newsletter featured an article discussing the current state of the global economy, highlighting its resilience with steady growth and controlled inflation. According to the High Frequency Indicators (HFI) for the third quarter of 2024-25, the Indian economy is showing signs of recovery after a slowdown in momentum during the second quarter. This recovery is attributed to robust festival activity and a continued increase in rural demand.
India’s economic growth rate has seen a significant slowdown, hitting its lowest level in almost two years, negatively impacting the overall outlook for the year. The country’s gross domestic product grew by 5.4 percent in the third quarter of the current fiscal year compared to the same period last year.
The RBI said India’s continued growth outlook aligns with a more sustainable foundation, fueled by positive climate initiatives such as the promotion of renewable energy, electric vehicles (EVs), green hydrogen and efforts to establish a carbon market.
