RBI Projects 8% Growth Amid Global Slowdown, Indicates Changes In Consumer Demand

In a recent report issued by the Reserve Bank of India (RBI), the economic outlook for the country has been portrayed positively, with a projected steady GDP growth rate of 8 per cent.

Despite the backdrop of a global economic slowdown and geopolitical uncertainties, the RBI maintains an optimistic view regarding India's overall macroeconomic stability, indicating conducive conditions for further growth.

Outlined below are the key insights presented in the RBI's bulletin, shedding light on the driving forces behind India's economic momentum.

Resilient Growth Amid Global Challenges
The RBI's monthly bulletin underscores India's resilience amidst a sluggish global economy. Despite the slowdown experienced by major economies, India has consistently maintained a GDP growth rate of over 8 per cent from FY21 to FY24. The bulletin emphasises the sustainability of this growth trajectory, fueled by robust demand and favorable macroeconomic indicators.

Changing Consumer Demand Dynamics
A significant observation highlighted by the RBI is the evolving nature of consumer demand within India. While the domestic Fast-Moving Consumer Goods (FMCG) sector might witness a slight moderation in the near future, demand for premium consumer products remains resilient. This shift is attributed to substantial changes in per capita income across the country. Additionally, despite the festive season, private final consumption expenditure remains subdued, indicating nuanced shifts in consumer behaviour.

Navigating Challenges Amidst Opportunities
Alongside the promising growth prospects, the RBI acknowledges existing challenges and disparities on both domestic and global fronts. While sectors approach a threshold of capacity utilisation that demands fresh investments, global geopolitical tensions and persistent inflation pose risks to global growth momentum. Nevertheless, India benefits from a favorable macroeconomic landscape, presenting opportunities for sustained growth. The RBI emphasises the importance of leveraging this environment to bolster infrastructure, manufacturing and technological capabilities, effectively turning challenges into long-term prospects for prosperity.