India's growth trajectory poised to lift in H2 FY25: RBI Bulletin

High frequency indicators for the third quarter (Q3) of FY25 indicate that the Indian economy is recovering from a moderation in momentum witnessed in Q2, driven by strong festival activity and a sustained upswing in rural demand, supported by record level food grains production, it noted.

Sustained government spending on infrastructure is expected to further stimulate economic activity and investment.

Consumer confidence was boosted by higher optimism for the year ahead, breaking out of the sequential moderation in the current assessment of conditions. Supply chain pressures remained below historical average levels, with further easing in November.

Global headwinds, however, pose risks to the evolving outlook for growth and inflation.

Expectations around India’s resilient growth trajectory going forward are also coalescing with a more sustainable underpinnings in view of positive climate action, with increased policy focus on renewable energy, electric vehicles (EVs), green hydrogen and steps towards institutionalising the carbon market, the Bulletin remarked.

“These concerted efforts indicate a promising path toward achieving net-zero emissions. Leveraging global frameworks for carbon trading and scaling climate finance, including green bonds, will further reinforce decoupling of growth and emissions,” it said.

Alongside, India is riding the wave of digitalisation to boost growth, improve productivity and enhance the reach of products and services, spurred by shifts in more discerning consumer behaviour and the deepening reach of online shopping, particularly in smaller towns.

This surge also underscores a growing investor confidence and the momentum of innovative energies driving India’s finance technology ascendency, the RBI Bulletin added.

ALCHEMPro News Desk (DS)