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The Reserve Bank of India has predicted a pick-up in India’s growth in the second half of FY25, driven by strong rural energy demand, rising demand for food crops, and more. According to the central bank’s monthly data, continued public investment in infrastructure is expected to boost economic activity and stimulate business. However, potential global issues could pose a risk to growth and inflation.
The RBI said: “India’s growth is poised to pick up in the second half of 2024-2025, driven largely by domestic private consumption demand. Supported by record high food production, rural demand, in particular, is growing.”
The December issue featured a report on the current state of the global economy, showing its resilience with steady growth and rising inflation. According to the economic frequency indicators (HFIs) for the third quarter of 2024-2025, the Indian economy is showing a recovery after a slight decline during Q2. This recovery is due to strong festival performance and increased rural population.
India’s economic growth slowed sharply, to the lowest level in nearly two years, undermining the outlook for the year. The country’s Gross Domestic Product has grown by 5.4% in the third quarter of this fiscal year compared to the same period last year.
The RBI pointed out that India’s prospects for continued growth depend on a stable base, supported by climate-friendly measures such as promoting renewable energy, electric vehicles (EVs), green hydrogen, and efforts to establish a carbon market.