The Reserve Bank of India (RBI) expects India's economy to record growth between 6.1% and 6.3% for the second quarter of the financial year FY23. In its latest monthly bulletin, RBI stated that if these growth rates are realised then the country is on course for a growth rate of about 7% in 2022-23.
RBI released November 2022 bulletin on Friday.
Giving an outlook for economic growth, RBI's bulletin said, "based on high-frequency indicators, our nowcasting and full information models peg real GDP growth in Q2 between 6.1% and 6.3%."
It added, "If this is realised, India is on course for a growth rate of about 7% in 2022-23."
Highlighting Q3 performances, RBI's bulletin added that "supply responses in the economy are gaining strength. The cumulative procurement of rice during this kharif marketing season has already crested last year’s collection. Although wheat procurement has declined quite sharply, the good news is that rabi sowing is up year-on-year backed up by good northeast monsoon rainfall and reservoir water storage levels."
Further, RBI's bulletin explained that Industrial production (IIP) shed the contraction in August and turned in positive momentum in September on a seasonally adjusted basis after a gap of two months. This is corroborated by the manufacturing purchasing managers’ index (PMI) for October. In the services sector, the PMI for October accelerated from a six-month low in September. The construction sector remains in expansion, and contact-intensive services, in particular, hospitality, travel and recreation, are experiencing explosive growth. Aggregate demand, on the other hand, is showing an uneven profile. While urban demand appears robust as the section on domestic developments profiles, rural demand which was muted, is gaining some strength recently.
RBI governor Shaktikanta Das' note said, "Indian economy has been growing steadily, drawing strength from its macroeconomic fundamentals and buffers."
He cited IMF data which mentioned that India is slated to be one of the fastest growing major economies of the world in the current year as well as in the next year.
The governor added, "Our policies – fiscal, monetary and regulatory – were prudent, targeted and time-bound. We were careful to ensure that demand remained in balance while supply conditions improved."
