RBI bulletin | Growth momentum to continue on govt spending

FPJ News Service mumbai

Despite high volatility in global financial markets, the Indian economy continues to demonstrate resilience, the Reserve Bank of India (RBI) said in its monthly bulletin released on Wednesday.

Private consumption expenditure is on an upward trajectory, signalling strong consumer confidence and sustained demand. Government spending has picked up significantly in recent months, providing a further fillip to growth.

Key sectors, including construction, financial services, and trade, continue to thrive as pillars of economic resilience. Various high-frequency indicators of economic activity point towards a sustained momentum in growth during Q4 as well. The first revised estimates of GDP for 2023-24 placed the real GDP growth at 9.2%—the highest in over a decade if we exclude the post-Covid rebound —demonstrating that in an uncertain world, India’s growth story remains a beacon of stability and progress, RBI said.

The resilience of the domestic economy is evident in the robust performance of the agriculture sector and improving consumption. The growth momentum is supported by robust sectoral performance and improving consumption trends. Estimates released by the National Statistics Office project a steady 6.5% growth for 2024-25. The latest quarterly data further underscores this strength, with real GDP expanding by 6.2% in Q3:2024-25, shaking off the sluggishness of the previous quarter.

Recent developments across different sectors reaffirm the assessment of a sequential pick-up in growth momentum. The kharif season 2024-25 has seen an upward revision in production estimates for foodgrains and oilseeds and rabi foodgrains registered a growth of 2.8%.

Despite a mild loss in momentum, the Indian manufacturing sector saw a rise in purchasing activity and employment in February 2025. The services sector recorded a strong expansion in new businesses and employment. Notwithstanding the innate strength built on strong macroeconomic fundamentals and prudent policy, the reverberations of a tumultuous external environment are also reflected in various segments of the economy.