Indian economy is on a firm footing: RBI annual report
Indian economy is on a firm footing with an improved external sector sustainability and a robust corporate balance sheet which along with a thrust on production linked incentive schemes could boost employment, said the Reserve Bank of India in its annual report.
«The outlook for the Indian economy remains bright, underpinned by a sustained
strengthening of macroeconomic fundamentals, robust financial and corporate sectors and a resilient external sector,» RBI said.
It projected a real GDP growth for 2024-25 at 7% for India, which turned out to be the world's fastest growing major economy last year. The growth is expected to be supported by improved prospects for agriculture and rural activity following the ebbing El Nino and the expected above normal southwest monsoon.
The economy grew at 7.6% in 2023-24 against 7% in 2022-23, navigating the drag from protracted geopolitical tensions and volatile global financial markets.
Despite fall in exports in sync with lower global demand, India's external sector gained strength with the narrowing of the current account deficit (CAD) and with foreign exchange reserves rising to all-time high.
The CAD moderated to 1.2% of GDP during April-December 2023 from 2.6 per
cent in the corresponding period a year ago, while foreign exchange reserves rose to $648.7 billion as on May 17, 2024, covering 11.4 months of imports and strengthening buffers against external sector risks and adverse spillovers..
The government’s thrust on capex while pursuing fiscal consolidation, and
