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Broad-based growth visible despite external risks: RBI
October 20, 2023
In a recent report, the Reserve Bank of India (RBI) announced a positive trend in the country’s economic indicators, despite external challenges. The RBI highlighted a decrease in retail inflation from its peak in July, indicating strengthened macroeconomic fundamentals. The report cited a rise in capacity utilization in the manufacturing sector, reaching 75.4% in April-June. Capital-heavy industries benefited from deleveraging and increased capacity utilization. The RBI emphasized the optimistic outlook due to sustained demand in services, consumer and business sectors, along with infrastructure investments.
The report also anticipated a boost in growth momentum from festive season spending. Business sentiment in manufacturing, services, and infrastructure remained positive, supporting the economy for the rest of the financial year. Senior loan officers predicted robust demand for bank loans in the latter half of the year, and despite a slight dip in employment between October and December, recovery was expected in January-March across various sectors.
Additionally, the RBI highlighted the growth potential in India’s digital payment ecosystem. The adoption of digital payments is set to increase, driven by innovations like conversational payments and the UPI Tap and Pay feature. Furthermore, merchant payments are expected to constitute 75% of all UPI transactions by 2025, up from 58.5% in September 2023. Despite global challenges such as rising yields and crude oil prices, India’s economy appears resilient, supported by these positive indicators and ongoing digital innovations.
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