NEW DELHI: Latest developments point out robust basis of macroeconomic stability in India with regular development, funding, employment, and inflation traits, and a robust and secure monetary sector, a finance ministry report mentioned on Thursday. Nevertheless, it cautioned that the problem is in navigating the persevering with uncertainty in world financial prospects.
“We’ll probably encounter a cycle of coverage fee cuts globally, amid fears of a recession in superior economies and persevering with geopolitical conflicts,” mentioned the finance ministry’s month-to-month financial report for Aug.
The report additionally flagged worries over surging inventory markets globally and the dangers linked to a potential correction. “Inventory markets world wide are booming, strengthened by current coverage bulletins in a number of international locations. Consequently, the danger of an eventual correction has risen. If the danger materialises, the spillover impact could also be felt globally as properly. Amidst these issues, low oil costs are a shiny spot for the economic system,” mentioned the report.
It additionally mentioned that for the remaining a part of the monetary 12 months, the expectation is that public expenditure will choose up, offering added development and funding impetus. Within the farm sector, increased kharif acreage is already seen. Adequately replenished reservoir ranges will doubtlessly give a fillip to the upcoming rabi crops as properly.
“On stability, the GDP growth of 6.7% in Q1FY25 and the actions in high-frequency indicators until Aug match properly with the actual GDP development projection of 6.5-7% for FY25 supplied by the Financial Survey 2023-24,” the report added. It mentioned the outlook for the inflation trajectory is constructive as benign core inflation, an excellent monsoon, and wholesome sowing progress of kharif crops are prone to preserve inflation underneath management.
“Headline retail inflation remained benign in Aug 2024 at 3.7%, with softening meals inflation and regular core inflation. Whereas replenished reservoir ranges and better kharif sowing acreage augur properly for the meals value outlook, the impact of the skewed spatial distribution of the monsoon warrants monitoring,” mentioned the report.
