Optimistic Growth Outlook: RBI Economic Surveys Point to Positive Signs

Photo : Indian express 

Reserve Bank of India’s forward-looking surveys point towards a positive outlook for the macroeconomic landscape across various sectors. In the services sector, firms reported further improvement in their overall business situation, job landscape, and turnover during the fourth quarter of 2023-24. While they faced higher cost pressures from input costs, salary outgo, and cost of finance, these pressures moderated during the quarter. Respondents also expressed optimism regarding the overall business situation, turnover, and employment conditions for April-June 2024. Service sector enterprises particularly highlighted the availability of finance, expecting it to improve further in the upcoming quarter.

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Infrastructure players also displayed optimism about the overall business situation, turnover, and employment conditions in the first quarter of 2024-25, albeit somewhat tempered compared to previous surveys. They remained highly positive about demand and employment conditions until Q3:2024-25, despite anticipating a further rise in input costs and selling prices until the end of 2024.

Bankers reported sustained loan demand across major sectors during Q4:2023-24 and expressed continued optimism regarding overall loan demand conditions during Q1:2024-25. The survey of professional forecasters on macroeconomic indicators projected real GDP growth in the range of 6.5-6.9% for both 2024-25 and 2025-26, with annual growth in real private final consumption expenditure (PFCE) and real gross fixed capital formation (GFCF) expected at 6.0% and 8.4%, respectively, for 2024-25.

In the industrial outlook survey, manufacturers reported better demand conditions in terms of production, order books, capacity utilization, and overall business situation for Q4:2023-24. They remained optimistic about demand conditions in Q1:2024-25, with over half of the respondents reporting a rise in production, order books, and overall business situation.

Household surveys indicated a moderation in inflation expectations for both the short and medium term. However, consumer confidence improved, with households expressing higher optimism in all parameters. Sentiments on the general economic situation, employment prospects, and discretionary spending all recorded notable improvements.

Overall, the surveys point towards a positive trajectory for the Indian economy, with improvements expected across various sectors, bolstered by optimistic outlooks from businesses and consumers alike.

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