The Governor of the Reserve Bank of India anticipated 7.3% GDP growth in the first quarter of 2024-25, expressing confidence in the ongoing economic momentum led by rural demand resurgence, government expenditure, and service exports. While inflation had been declining, the final leg of disinflation could be difficult due to unpredictable food costs.
The Monetary Policy Committee (MPC) reduced its FY25 growth prediction to 7.2% from the previously expected 7%. Growth was anticipated to be 7.3% in the first quarter, 7.2% in the second, 7.3% in the third, and 7.2% in the fourth quarter, compared to prior predictions of 7.1%, 6.9%, 7%, and 7%, respectively.
Fast-moving consumer goods sales in rural regions have risen, while demand for the Mahatma Gandhi National Rural Employment Guarantee Act has diminished. The agricultural forecast is similarly positive, with this year’s southwest monsoon expected to be above normal.
As a result, rural demand is recovering, which was previously weak. As government and private investment expenditures unfold, rural demand will likely remain strong throughout the year. India’s CAD could be less than one percent in FY24. In the third quarter of FY24, CAD was 1.2% of GDP, down from 1.3% in the second quarter.
Last month, the RBI announced the final framework for establishing self-regulatory organisations in the financial technology sector (SRO-FT), encouraging firms to have a fintech- representative membership.