Indian Economy There is good news for. Amidst the uncertainties at the global level, the pace of the Indian economy will pick up again. In the monthly report of the Finance Ministry released on Thursday, it was said that the country’s GDP growth rate slowed down in the second quarter of the current financial year and it came down to 5.4 percent. The Finance Ministry, in its monthly economic review for November, said that after a slowdown in the second quarter of FY 2024-25, the outlook for the third quarter looks better. This is reflected in the key data (GST collections, PMI etc.) for October and November.
Due to this reason the growth rate is expected to increase
It said the increase in minimum support price (MSP) for Rabi crops, high water level in the reservoir and adequate fertilizer availability are good signs for Rabi sowing. Overall, industrial activities are likely to accelerate. According to the report of the Finance Ministry, the growth outlook in the second half of the financial year 2024-25 is better than the first half. It has been said that the reason for the slowdown in demand could possibly be the monetary policy stance and prudential measures of the Central Bank. Are. According to the report, the good news is that the central bank reduced the cash reserve ratio (CRR) from 4.5 percent to four percent in its monetary review meeting in December, 2024. This will help boost credit growth, which has slowed down somewhat in the financial year 2024-25.
Pressure on rupee increases due to strengthening of dollar
According to the report, if we look at the financial year 2025-26, new uncertainties have emerged and global trade growth looks more uncertain than before. It also says that the high level of the stock market is posing a big risk. The strengthening of the dollar and policy rate rethink in the US have put emerging market currencies under pressure. This will make monetary policymakers in emerging economies think more deeply about policy rates. It said that overall, to sustain growth, all stakeholders will need to work together and commit. Regarding PMI, the report said that the data for October and November show that new orders from companies are increasing and demand is strong. With this, they are expanding. The report says the expected increase in government capital expenditure is expected to support the cement, iron, steel, mining and power sectors. However, domestic growth is threatened by uncertainties and aggressive policies in many major economies.
Rural demand remains strong
On the demand side, it said, rural demand remains strong. This can be estimated from the growth of two-wheeler and three-wheeler sales and domestic tractor sales by 23.2 percent and 9.8 percent respectively during October-November, 2024. Urban demand is increasing. Passenger vehicle sales increased by 13.4 percent year-on-year in October-November, 2024. Domestic air passenger traffic recorded strong growth. According to the report, RBI has estimated consumer price index based inflation to be 4.8 percent for the financial year 2024-25. Whereas it is estimated to be 5.7 percent in the third quarter and 4.5 percent in the fourth quarter. It said that the outlook for the agriculture sector is optimistic. This gives hope that the pressure on food prices will gradually reduce.
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