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:
https://www.youtube.com/watch?v=MLRj6js0X5U
https://www.youtube.com/watch?v=ung7VREhwYI
Download our Mobile Application: Android
Mobile | IOS
Mobiles
Our Website's:
https://www.bestlearningcentre.in/
Office Location:
https://goo.gl/maps/9JCNNv3HAkC4b92X7
For any clarification, you may contact us at any time.
Educational Counsellor: 7418968881
Customer Support: 7418978881
Enrol Now for Fresh Batch in UPSC | TNPSC | BANK | SSC | RRB |
POLICE | TNTET | CTET | NDA| CDS | AFCAT | DEFENCE | TANCET | CAT | MAT | ZAT
EXAMS.
Call Admission Desk: 7418968881
Book Free Demo Class Now !
Batches available in ONLINE & OFFLINE
