The Reserve Bank of India (RBI) stated in its most recent State of the Economy report that private consumption is anticipated to be the primary driver of growth in India’s gross domestic product (GDP) in the first quarter (Q1) of the fiscal 2023–24.
According to the survey, inflation is expected to decrease from 6.2 percent in the previous quarter to 5.1 percent in Q1 FY24 as inflationary pressures are reducing.The emphasis on capital expenditure in public expenditures and the slowdown in commodity prices, it was stated, will support an improvement in investment activity.
A reduction in input cost pressures is anticipated to benefit the manufacturing industry as a whole.The April 2023 consumer price index (CPI) inflation print shows that momentum is turning out to be softer than anticipated.
Moreover, with capacity utilisation in manufacturing straining at trend levels and above it in some industries, private capital spending will need to get stronger to add additional capacity as demand picks up, the report said.
