Cash News
The Union finance ministry on September 26 noted that India’s economic momentum was sustained in the first quarter of FY25. By the end of FY24, the economy had not only recovered the ground lost during the pandemic but also made significant advancements in various productive sectors, with a cumulative real GDP growth of approximately 27% since FY21.
According to official data, retail inflation in August slightly increased to 3.65%. The prices of vegetables and pulses saw a double-digit rise during this period. The Consumer Price Index (CPI) based retail inflation, however, stayed below the Reserve Bank’s target of 4% for the second consecutive month. In July, it had reached a five-year low of 3.6%. The headline inflation for August 2023 was recorded at 6.83%.
“Looking ahead, the outlook for inflation trajectory is positive as benign core inflation, good monsoon, and healthy sowing progress of Kharif crops are likely to keep inflation under control,” the monthly report stated.
The GDP growth rate for Q1FY25 was 6.7%, in line with the projected real GDP growth rate of 6.5-7% for FY25.
“Major items of food inflation, such as cereals, meat & fish, milk, sugar and spices, saw a decline in inflation. The inflation rate in vegetables increased in August due to the elevated inflation rate in potatoes and onions. Food inflation in August stood at 5.7 per cent, a modest increase from July, yet notably lower than the 8.9 per cent experienced in Q1 of FY25. Inflation in the fuel & light group continued to remain in the deflationary zone for the 12th consecutive month,” said the document.
Going forward, the ministry expected an increase in public expenditure in the latter part of the fiscal year, which will drive growth and investment. In the agricultural sector, higher Kharif acreage and favorable reservoir levels are expected to support the upcoming Rabi crop.
The report highlighted these positive developments as indicative of a strong foundation of macroeconomic stability in India, with stable trends in growth, investment, employment, and inflation.
“A challenge on the macroeconomic front is navigating the continuing uncertainty in global economic prospects,” the Finance Ministry said.