The Reserve Bank of India (RBI) on Friday raised the GDP growth forecast for the current fiscal to 7.2 per cent from 7 per cent with economic activity sustaining its momentum because of rising private consumption, revival of rural demand and traction in investment activity. The economy grew 8.2 per cent in the last fiscal.
“During 2024-25 so far, domestic economic activity has maintained resilience,” RBI governor Shaktikanta Das said.
While manufacturing activity continued to gain ground on the back of strengthening domestic demand, the services sector maintained buoyancy as evident from available high frequency indicators.
"Private consumption, the mainstay of aggregate demand, is recovering, with steady discretionary spending in urban areas. Revival in rural demand is getting a fillip from improving farm sector activity. Investment activity continues to gain traction, on the back of ongoing expansion in non-food bank credit," he observed.
Merchandise exports has also expanded in April with improving global demand.
The forecast of above normal south-west monsoon by the India Meteorological Department (IMD) is expected to boost kharif production and replenish the reservoir levels. The strength in agricultural sector activity is expected to boost rural consumption.
