Indian Economy - 19-07-2024

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As of July 19, 2024, the Indian economy continues to exhibit robust growth, maintaining its position as one of the fastest-growing major economies globally. Here are some key highlights:

  1. GDP Growth: India's GDP growth rate for the fiscal year 2023-24 reached 8.2%, driven by strong performance in the manufacturing and construction sectors, which grew by 9.9% and 8.4%, respectively​​. The Reserve Bank of India (RBI) has projected the economy to grow by 7.6% for the fiscal year 2024-25​​.

  2. Inflation: Headline retail inflation in India has been moderating, remaining stable at around 4.83% as of April 2024. This trend is expected to continue, contributing to economic stability​​.

  3. Monetary Policy: The RBI has maintained the repo rate at 6.5% since February 2023, reflecting a cautious approach to balancing growth and inflation. The central bank's focus remains on ensuring price stability while supporting economic expansion​​.

  4. Fiscal Deficit: The fiscal deficit for FY24 improved to 5.63% of GDP, better than the government's target of 5.8%. This improvement is attributed to higher tax collections and lower than expected subsidy payouts​ ​.

  5. Private Investment and Consumption: There has been a notable increase in private investment, which grew by 10.6% year-on-year, reflecting confidence in the economic environment. Private consumption also showed improvement, although it remains an area to watch for sustained growth​​.

  6. Sectoral Performance: While the manufacturing and construction sectors have shown significant growth, the agricultural sector experienced a contraction of 0.6% due to adverse weather conditions impacting crop production. This has raised concerns about potential inflationary pressures on food prices​​.

Overall, the Indian economy is expected to maintain strong growth momentum, supported by resilient domestic demand, prudent fiscal management, and stable monetary policies. The outlook for the near term remains positive, with growth projections between 7.6% and 7.8% for the current fiscal year​.

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