New Delhi

India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions, the Reserve Bank of India's (RBI’s) October bulletin said as detailed in a report by the Press Trust of India.

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The global economy remained resilient in the first half of 2024, with declining inflation supporting household spending. Stable growth momentum amid monetary policy easing is becoming the prevailing theme across most economies, according to an article on 'State of the Economy' published in the bulletin that was released on October 21.

The article further stated that as per its economic activity index (EAI), the gross domestic product (GDP) growth is projected at 6.8 per cent in the July-September 2024 quarter, lower than the RBI’s projection of 7 per cent for the same period.

Whereas, in the quarter ended June 2024, the real GDP growth slipped to a five-quarter low of 6.7 per cent due to slower growth in agriculture, government spending and services. "In spite of geopolitical tensions, India’s growth outlook is supported by robust domestic engines," it said, the PTI report detailed further.

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It also noted that some high-frequency indicators have, however, shown a slackening of momentum in the second quarter of 2024-25, partly attributable to factors like unusually heavy rains in August and September.

"Looking ahead, private investment is showing some encouraging signs in terms of lead indicators while consumption spending is shaping up for a festival season revival," said the article authored by a team led by RBI deputy governor Michael Debabrata Patra.

After remaining below target for two consecutive months, inflation surged in September, as an adverse statistical base effect was compounded by a resurgence in food price momentum. The central bank said the views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India.

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Focus on the private sector

“The stage is set for the private sector to deploy capital and invest in growth, build capacities, create employment and improve efficiencies,” the article stated.

It further said that with the financial sector ready to intermediate resources for productive investment, buffered by healthy balance sheets, and the government’s continued thrust on capex, the investment outlook appears bright.

“The ongoing strengthening of global trade could provide a fillip to external demand for India’s exports although escalation of geopolitical tensions remains a potential threat,” the article also stated.