RBI's recent projection for India's GDP stands at 6.5 % for the upcoming year. The slump in the GDP came because of ongoing world issues like the Israel- Palestine War, certain economies failing to pick up in the Global North, and uneven monsoon.
There's an atmosphere of uncertainty prevailing as per the RBI governor. Especially, in the past days due to the Israel-Hamas Conflict.
The Arab countries hold a major share in the fuel supply. Therefore, the conflict can trigger global food, fuel, and fertilizer supplies.
Finance Minister Nirmala Sitharaman has flagged worries about the same.
India is highly dependent on fuel imports. Any volatility can hurt the macroeconomic framework of the country. Because of the election season, the government is cautious about it.
The US bond yields are on the rise. Bond yields hit a 16-year high of 5% as pointed out by the RBI Chief.
There's financial turmoil around the world as expressed by Central Bank governors from across the world. Therefore, stock markets have become volatile.
Seasonal surge in TOP (Tomato-Onion- Potato) prices in July- August indicated inflationary pressure on the economy. However, the monthly economic review released on Monday depicts inflation is on track and is stable in the current period.
Due to the easing out of inflation, consumption, and Investment demand has started picking up.
Fears around the rise in crude oil prices, the monthly review noted that the prices are under control and far below the average prices recorded in the last quarter.
The current Account Deficit is a concern for the Indian Economy. The government is focusing on the indigenization of products.
There's a surge in demand for vehicle and housing loans which shows restored confidence of the domestic consumers and increased spending in the economy that will boost investment.
The last quarter has seen a sharp downfall in automobiles especially, small car sales. Producers failed to capture rural demand. The alleged reason would be food inflation.
IT firms are cutting down on hiring. There are signs of uneven recovery.
RBI needs to incorporate a holistic plan that moves towards a broad macroeconomic framework for the upcoming fiscal year.
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