[1/2] Workers work within the engineering products export department at the Faridabad manufacturing base outside New Delhi, India, on January 13, 2023.Reuters/Manoj Kumar
MUMBAI (Reuters) – The Indian economy is maintaining the growth momentum seen in the final quarter of 2022-23 and the latest inflation results have beaten expectations, the Reserve Bank of India said on Monday.
In its “Economic Conditions” report released by the central bank, it expects growth in the first quarter of 2023/24 to be driven by new dynamism in the manufacturing sector due to consumer spending, a rebound in local demand and easing input cost pressures. said that As part of the monthly newsletter.
“Investment activity is also expected to improve due to increased capital expenditures in public sector investment and restrained commodity prices,” he added.
India’s services exports rose 13.1% year-on-year to $30.48 billion in March, according to preliminary RBI data from early May. Service exports rose to $30.36 billion in April, according to provisional government figures.
The RBI said the impact of net external demand would ease in April-June 2023 if services exports maintain their recent high momentum.
“Domestic services sector activity will continue to be driven by the recovery of contact-intensive services and the resilience of construction activity,” it added.
Based on partial data available in April 2023, the RBI estimates that, assuming an implicit GDP growth rate of 5.1% in Q4 2022/23, the economic activity index is now at It said it forecast GDP growth of 7.6%.
Data earlier this month showed India’s annual retail inflation slowed to 4.7% in April from 5.66% the previous month.
The RBI said inflationary momentum had softened more than expected due to a fall in wheat prices, a fifth consecutive month of falls in oil prices and a third consecutive month of falls in egg prices.
“The decline in headline inflation is due to the combined effects of tighter monetary policy, supply-boosting measures and favorable base effects,” the RBI said.
India’s wholesale price inflation rose 1.34% in March, but fell 0.92% year-on-year.
The central bank said a pass-through of wholesale price movements under deflation in April could also contribute to softening retail inflation going forward.
Reported by Swati Bhat.Editing: Saumyadeb Chakrabarty
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