Indian economy is set to potentially log a stable high growth phase ahead, Shashank Bhide, Monetary Policy Committee member, RBI, said. The economy remains in a strong position in light of the major risks the country is facing, he pointed out.
In a conversation with PTI, the official noted that the domestic economic activity is estimated to maintain its growth momentum as flourishing income levels provide support to demand at the local level and the production or supply capacity intensifies backed by escalated levels of investment spending seen in the last couple of years.
“In terms of growth momentum and inflation trajectories Indian economy is poised for potentially a stable high growth phase. It is also in a strong position in the context of significant risks that are also facing us,” he shared.
Notably, the current official estimate of GDP growth for the 2023-24 fiscal year stands at 8.2 per cent, improving from 7 per cent clocked in the preceding 2022-23 fiscal year. Earlier in the month, the Reserve Bank of India fixed the GDP growth rate for the 2024-25 fiscal year (FY25) at 7.2 per cent.
Explaining the factors behind the positive outlook, Bhide said that the monsoon rainfall is expected to be normal in the year and could help boost growth and control food inflation. He said that better global demand conditions are needed to push external demand for goods and services, ‘sizable capital inflows supporting investment, reflect both the supply side efficiencies and high growth potential of the economy both in terms of domestic demand as well as India's exports’.
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Responding to a query about inflation, Bhide noted that the major worries regarding the matter remained in terms of the impact of risks from any extreme weather events, obstructions in the global supply chains owing to international issues, and the muted recovery of the global economy from the latest surging inflation levels.