Current Affairs

RBI State of the Economy Report (March 2024)

RBI State of the Economy Report (March 2024):

In March 2024, the Reserve Bank of India (RBI) unveiled its 'State of the Economy' report, offering insights into the nation's economic performance and future prospects. The report, penned by RBI officials including Deputy Governor M D Patra, stressed the importance of maintaining a cautious monetary policy to steer inflation towards the 4% target. It also highlighted an upward trajectory in per capita income, drawing on data from the Household Consumption Expenditure Survey (HCES).

Inflation and Monetary Policy:

The report highlighted persistent fluctuations in food prices as a key factor impeding a swift decline in headline inflation towards the 4% target. Despite a decline in core inflation, which has been widespread and among its lowest levels, food price pressures have restrained the downward trend in headline inflation.

Data from January and February 2024 revealed shallow and short-lived relief in winter vegetable prices, while cereal prices remained strong and meat/fish prices surged. Consequently, the report emphasized the necessity of maintaining a risk-minimization stance in monetary policy, balancing inflation management with sustaining growth momentum.

Demand and Consumption:

Private final consumption expenditure stayed subdued despite the festival season during the third quarter. However, rising per capita income signals robust demand prospects for premium consumer sectors. HCES data indicated increasing spending on durables and discretionary goods in both rural and urban markets, with real per capita income growing 1.5 times since 2011-12 at a 4% compound annual growth rate (CAGR).

The report forecasted moderate growth for the domestic fast-moving consumer goods (FMCG) sector over the next six months, while noting a decline in government final consumption during the October-December quarter.

Investment and Infrastructure:

The third quarter of 2023-24 witnessed aggregate demand buoyed by investment, with signs of a resurgence in private capital expenditure. Anticipated advancements in road infrastructure include record-length four-lane roads and access-controlled highways, laying the groundwork for a world-class road network by 2037.

Economic Growth Projections:

Real GDP surged to a six-quarter high in October-December 2023, fueled by robust momentum, strong indirect taxes, and reduced subsidies. The report projected economic growth to approach 8% for the current fiscal year (FY24), surpassing the National Statistical Office's (NSO's) estimate of 7.6% (Second Advance Estimate).

Based on nowcasts and high-frequency indicators for the fourth quarter, the report suggested that the NSO's FY23-24 estimate will likely be exceeded, with growth closer to 8%.

For FY25, statistical models projected a growth rate of 7.4%, with the in-house Dynamic Stochastic General Equilibrium (DSGE) model suggesting robust GDP growth at 7.4% during 2024-25.

Inflation Outlook:

CPI inflation is anticipated to average 4.4% during 2024-25, lower than the 5.4% projected for 2023-24, with most of the decline anticipated in the first half of the next fiscal year.

Key Exam Insights:

The 'State of the Economy' report is authored by RBI officials, including Deputy Governor M D Patra, though the views expressed may not necessarily reflect those of the central bank.

The Household Consumption Expenditure Survey (HCES) serves as a vital source of data on per capita income and spending trends in India.

The Dynamic Stochastic General Equilibrium (DSGE) model is a modeling tool used by central banks and other institutions to analyze and forecast macroeconomic variables.

Know More:

Read daily current affairs in English : Click Here

Read daily current affairs in Tamil : Click Here

Check the latest jobs update details : Click Here

Our Achievements:


Download our Mobile ApplicationAndroid Mobile | IOS Mobiles


Our Website's:


Office Location:

For any clarification, you may contact us at any time.

Educational Counsellor: 7418968881

Customer Support: 7418978881



Call Admission Desk: 7418968881

Book Free Demo Class Now !

Batches available in ONLINE & OFFLINE

RBI State of the Economy Report (March 2024)