India’s economic growth will be supported by rebounding consumer spending, government review finds By Reuters
© Reuters. FILE PHOTO: Workers load consumer goods onto supply trucks at a wholesale market in Kolkata, India December 14, 2021. REUTERS/Rupak De Chowdhuri
MUMBAI (Reuters) – A sharp rebound in consumer spending and an increase in employment will support India’s economic growth in the coming months, the government said in its monthly economic update for August released on Saturday.
He said an increase in private consumption and higher capacity utilization rates had helped private sector capital spending to one of its highest levels in the past decade.
Business investment was buoyed by government spending which rose 35% in April-August compared to the same period a year ago, the report said, adding that government tax revenue growth was sustained.
The report also indicates that high levels of foreign reserves, sustained foreign direct investment and strong export earnings have provided reasonable protection against the normalization of monetary policy in advanced economies and the widening of the current account deficit. resulting from geopolitical conflicts.
The Reserve Bank of India forecast on Friday that the country’s current account deficit would remain at less than 3% of gross domestic product in the current fiscal year to March 2023 and said it was “completely fundable”.
India is in a better position to calibrate its liquidity levels without abruptly blocking growth, the report said, adding that inflationary pressures in the country appear to be easing.
But he also said that during the winter months, geopolitical tensions could rise amid heightened international focus on energy security and this could test “India’s shrewd management of its energy needs so far. “.
“In these uncertain times, it may not be possible to stay content and sit back for long periods. Eternal macroeconomic vigilance is the price of stability and sustained growth,” he said. he adds.