RBI report highlights robust GDP growth
India’s GDP growth remains robust, driven by solid investment demand and supported by the healthy balance sheets of banks and corporations, according to the Reserve Bank of India (RBI). The central bank’s Annual Report for 2023-24, released on Thursday, also attributes this growth to the government’s focus on capital expenditure and prudent monetary, regulatory, and fiscal policies.
The RBI noted that despite facing challenges from an adverse global macroeconomic and financial environment, the Indian economy is well-positioned to enhance its growth trajectory over the next decade, supported by macroeconomic and financial stability.
The report highlights that as headline inflation moves towards the target, consumption demand, particularly in rural areas, is expected to increase. Additionally, the strength of the external sector and foreign exchange reserves will help shield domestic economic activity from global disruptions.
However, the report cautions that geopolitical tensions, geoeconomic fragmentation, global financial market volatility, international commodity price fluctuations, and erratic weather conditions pose risks to the growth outlook and could increase inflation pressures.
The RBI also pointed out that the Indian economy must navigate the challenges posed by the rapid adoption of artificial intelligence and machine learning technologies, as well as recurrent climate shocks.
The annual report, a statutory document of the RBI’s central board of directors, covers the bank’s operations and functions for the period from April 2023 to March 2024.
