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Incoming data on economic growth mixed but positive factors outweigh negative ones: Das
Nov-07-2024

Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the incoming data on economic growth is ‘mixed’, but the positive factors outweigh the negative ones. He stressed that the underlying economic activity by and large remains strong. He said it can be noted that many analysts have been voicing concerns about growth, especially after official data showed growth slowing to a 15-quarter low of 6.7 per cent in the first quarter of FY25. However, the RBI has been holding onto its estimate of 7.2 per cent real GDP growth for FY25, even as some expect it to be lower than 7 per cent. 

RBI Governor said the RBI tracks over 70 high-speed indicators to arrive at its estimates and described both the positive factors pushing the number and the negatives pulling it down. The industrial production or IIP data, and moderation in urban demand being witnessed by fast-moving consumer goods companies are the negative factors. Besides, subsidy outgoes have increased in the September quarter and will impact the Q2 GDP number. The positives include the handsome growth in GST e-way bills, toll collections, air passenger traffic, and steel and cement industry performance. Amid the increased discussion on the auto sector prospects recently with concerns around rising inventory amid lower demand, Das said the sector has done exceedingly well in October with a 30 per cent growth which includes a 23 per cent rise in four-wheeler sales. Additionally, the agriculture and services sectors are also doing well.

On inflation, he said the October headline consumer price inflation number to be announced on November 12 will be higher than September’s 5.5 per cent, but added that the central bank had already pencilled in the higher numbers for the two months. He said the shift in stance of the monetary policy should not be seen as a precursor to a rate cut at the very next meeting of the rate-setting panel. He added that the panel is under no pressure on the next course of action. 


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