Indian economy gaining strength amid weakening global prospects: RBI article

PTI, Sep 18, 2023, 7:26 PM IST

Amid weakening global prospects, the Indian economy is gaining strength led by domestic private consumption and fixed investment with strong public sector capital expenditure, said an article published in the latest RBI bulletin.

The outlook for the global economy remains ambivalent, driven by a dichotomy in macroeconomic conditions across regions, the article on ‘State of the Economy’ stated.

While expectations of a ‘Goldilocks’ soft landing in the US are strengthening, concerns about slowdowns in China and Europe are rife, it said, and added that the impact of aggressive monetary tightening is spreading, with the services sector joining housing, bank lending and industrial production in a loss of momentum.

The article authored by a team led by RBI deputy governor Michael Debabrata Patra also noted that India’s G20 Presidency and its outcomes with the ethos of ‘Vasudhaiva Kutumbakam’ as the vision of global progress assume significance in an environment where global economic activity is experiencing a loss of momentum with a dichotomy in macroeconomic conditions across regions.

”Amidst weakening global prospects, the Indian economy is gaining strength led by domestic drivers – private consumption; and fixed investment with strong public sector capex.

”Supply responses are improving and headline inflation has softened in August from the previous month’s peak,” it said.

The central bank, however, said views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.

The article further said India’s space efforts are significant for the country’s socio-economic development. The space industry plays a key role across several application areas, including weather forecasting, geological and oceanographic studies, disaster management and agriculture, to name a few.

It has also played a crucial role in the country’s defence and security. Currently, India accounts for about 2 per cent of the global space economy, but this share is set to grow exponentially with rising private participation.

Chandrayaan-3 and Aditya L1 will boost India’s capability to undertake complex space missions that contribute to the advancement of space technology for the betterment of humanity, the authors said.

Small steps became a giant leap in a ‘moonshot serenaded’ around the world when Chandrayaan-3 touched down on the south pole of the moon on August 23, it added.