Resilience and Recovery: India's Economic Outlook Amid Global Challenges

The Indian economy shows signs of recovery from a Q2 slowdown, driven by strong festival sales and rising rural demand, according to an RBI bulletin. The report highlights the resilience of India's economy amidst global challenges, while underscoring inflation's impact on purchasing power and investment.

The latest Reserve Bank of India (RBI) bulletin points to a rebound in the Indian economy after a slowdown in the September quarter, fueled by vibrant festival activity and increasing rural demand. The December bulletin highlights steady global growth and moderating inflation.

High-frequency indicators for Q3 of 2024-25 depict a recovering Indian economy, primarily buoyed by solid domestic consumption. Record foodgrain production amplifies rural market momentum, while government infrastructure investments stimulate broader economic activity and investment.

Despite global headwinds, India's growth forecast remains positive, with GDP expected to elevate in the coming quarters. Inflation remains a concern, eroding purchasing power and affecting private investment, yet projections suggest recovering GDP growth and moderated inflation by 2025.

(With inputs from agencies.)