The Indian Express (Delhi Edition)
Broad-based uptick in overall economy, says RBI report
HIGH-FREQUENCYECONOMICINdicators show a broad-based gaining of momentum in economic activity in August and September amid the decline in retailinflationtothefive-percent level, a Reserve Bank of India (RBI) article said on Thursday.
According to the article on 'Stateoftheeconomy'published inthelatestrbibulletin, high-frequencyindicatorsfortheservices sector reflect a broad-based uptickinoveralleconomicactivity in September 2023. Higher year-on-yeargrowthinaircargo, railwayfreightandconstruction indicators of steel consumption andcementproductionvalidated the uptick, it said.
“The festival season is all set to light up volumes of e-commercesales. Entry-levelpricesof electronics are poised to fall in spiteof thefocuson‘premiumisation’,” the report said.
“Consumerconfidenceisupbeat on online shopping, with widerchoices, competitivepricing and the convenience of easy return and exchange lifting up theonlineshoppingexperience. In response, pan-india demand for warehousing has outgrown supplybyanestimated1.4times, withanaveragegrowthof10per
Mumbai: The US dollar’s strength is now a global risk, tightening the already tight financial conditions even more, the RBI’S ‘State of the economy’ report said. Even as energy importers reel under the impact of soaring crude oil prices that resurrect the spectre of inflation alongside external vulnerabilities, the US dollar gets ever stronger on the heft of surging treasury yields, creating a pernicious feedback loop, it said. “The more this toxic vortex persists, the greater is the pain for the world,” the RBI said. centinrentals, therbistudysaid.
It said rural consumers also appear to be ready to join the party: thereisarevivalindemand for fast moving consumer goods after the September showers in spite of an uptick in freight and packaging costs. “With kharif sowing acreage exceeding last year’scoverage, joblessnessinruralareasfellinseptember,” itsaid.
On the other hand, global growthlostpacefromq3:2023on the back of weak manufacturing activityandtightfinancialconditionsinadvancedeconomieseven as several emerging market economies posted growth surprises. Surgingyieldsandsoaring crude oil prices have emerged as proximateriskstoglobalgrowth, therbiarticlesaid.
In India, a broad-based gainingof momentumisdiscernible in high frequency indicators. Deleveraging and higher capacityutilizationhaveenabledcapital-heavyindustriestogaintraction. “The Indian rupee (INR) is exhibiting low volatility. Inflationhasmoderatedfromits July peak, bolstering macroeconomic fundamentals,” it said.
“A major positive development is the relative stability in core inflation, with services inflation muted. While risks are evenly balanced, with weather conditions and volatile global energyandfoodpricesweighing in on the upside, firms across manufacturingandservicessectors expect moderation in growth of selling prices,” it said.
The softening in inflation by 180bpstofivepercentcamefrom a strong negative momentum of around 110 bps and a favourable baseeffectofaround60bps. Food prices recorded a m-o-m decline of around 180 bps while fuel pricesfellaround390bpsmonthon-monththeindexofcoreprices (CPI excluding food and fuel) remainedunchanged, therbisaid.