MUMBAI: Retail inflation has moderated due to monetary policy actions and supply-side interventions, but “we are still not out of the woods and we have many miles to go,” a RBI bulletin on Thursday said. “.
An article on the state of the economy in the November Bulletin also said the global economy showed signs of slowing in the current quarter as manufacturing declined while services sector activity reached the end of its post-pandemic expansion. Is.
Going forward, it said a tightening of financial conditions remains a significant risk to the global outlook.
“In India, the pace of change in GDP is expected to be sequentially higher in Q3 2023-24, with festive demand remaining strong,” the article, written by a team led by reserve Bank of India Deputy Governor Michael Debabrata Patra said.
The authors said investment demand appears to be resilient, driven by government infrastructure spending, increased private capital expenditure, automation, digitalization and indigenization.
Referring to headline inflation based on the Consumer Price Index (CPI), the article said that a combination of monetary policy action and supply-side interventions guided inflation down from the high levels where it stood in the first seven months of 2022-23. had climbed over the course of months.
In fact, November 2022 was the first month when headline inflation came back to the RBI’s tolerance band of 2-6 per cent in the entire calendar year.
“We are not out of the woods yet and we have miles to go, but the readings of around 5 per cent and 4.9 per cent in September and October, respectively, are a welcome relief from an average of 6.7 per cent and 7.1 per cent in 2022-23. percent in July-August 2023,” it said.
However, the RBI said the views expressed in the article are those of the authors and do not represent the views of the central bank.
The article further states that India’s external sector remains viable, with a modest current account deficit (CAD) financed by flexible capital flows, one of the least volatile currencies in the world and a healthy level of foreign exchange reserves.
It said the pace of growth has accelerated, pushing gross domestic product well above pre-pandemic levels and making the economy the world’s fifth-largest at market exchange rates.
“Strong policy initiatives are showing results, with the financial sector demonstrating soundness and supporting the credit needs of the emerging economy,” it said.
The 37th edition of the State of the Economy article marks the third year of its revival after a long gap of 25 years.
An article on the state of the economy in the November Bulletin also said the global economy showed signs of slowing in the current quarter as manufacturing declined while services sector activity reached the end of its post-pandemic expansion. Is.
Going forward, it said a tightening of financial conditions remains a significant risk to the global outlook.
“In India, the pace of change in GDP is expected to be sequentially higher in Q3 2023-24, with festive demand remaining strong,” the article, written by a team led by reserve Bank of India Deputy Governor Michael Debabrata Patra said.
The authors said investment demand appears to be resilient, driven by government infrastructure spending, increased private capital expenditure, automation, digitalization and indigenization.
Referring to headline inflation based on the Consumer Price Index (CPI), the article said that a combination of monetary policy action and supply-side interventions guided inflation down from the high levels where it stood in the first seven months of 2022-23. had climbed over the course of months.
In fact, November 2022 was the first month when headline inflation came back to the RBI’s tolerance band of 2-6 per cent in the entire calendar year.
“We are not out of the woods yet and we have miles to go, but the readings of around 5 per cent and 4.9 per cent in September and October, respectively, are a welcome relief from an average of 6.7 per cent and 7.1 per cent in 2022-23. percent in July-August 2023,” it said.
However, the RBI said the views expressed in the article are those of the authors and do not represent the views of the central bank.
The article further states that India’s external sector remains viable, with a modest current account deficit (CAD) financed by flexible capital flows, one of the least volatile currencies in the world and a healthy level of foreign exchange reserves.
It said the pace of growth has accelerated, pushing gross domestic product well above pre-pandemic levels and making the economy the world’s fifth-largest at market exchange rates.
“Strong policy initiatives are showing results, with the financial sector demonstrating soundness and supporting the credit needs of the emerging economy,” it said.
The 37th edition of the State of the Economy article marks the third year of its revival after a long gap of 25 years.
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