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Economic growth to be sustained by consumer spending rebound, says Govt in economic assessment report

The government has indicated in its monthly economic assessment for August, which was released on Saturday, that a substantial increase in consumer spending and rising employment will support economic growth in India in the months to come.

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New Delhi: The government has indicated in its monthly economic assessment for August, which was released on Saturday, that a substantial increase in consumer spending and rising employment will support economic growth in India in the months to come.

The private sector’s capital investment had reportedly reached one of its greatest levels in the previous ten years thanks to rising private consumption and capacity utilisation rates.

According to the research, government spending rose 35% in April to August compared to the same time last year, which has stimulated business investment. The report also noted that the government’s growth in tax revenue has been strong.

High levels of foreign exchange reserves, ongoing foreign direct investment, and robust export earnings, according to the report, have provided a respectable buffer against the normalisation of monetary policy in advanced economies and the ensuing expansion of the current account deficit brought on by geopolitical conflict.

The Reserve Bank of India predicted on Friday that the country’s current account deficit will be “eminently financeable” and stay within 3% of gross domestic product in the current fiscal year through March 2023.

The research said that India is in a better position to regulate its liquidity levels without abruptly stopping growth and that inflationary pressures in the nation seem to be abating.

However, it also said that over the winter, geopolitical tensions would increase amid a sharpened focus on energy security, which might put to the test “India’s adept managing of its energy demands thus far.”

“In these uncertain times, it may not be possible to remain satisfied and sit back for long periods. Eternal macroeconomic vigilance is the price for stability and sustained growth,” it added.

 

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