The high visibility of structural demand and healthier corporate and bank balance sheets are likely to propel India’s growth going forward even as the global economy is losing steam, according to the RBI’s monthly bulletin released on Tuesday.

The report states that high-frequency indicators point to a further levelling of growth in the global economy in the period going ahead.

While business activity is showing some slender improvement in both advanced and emerging economies, external demand remains subdued amidst country-specific weaknesses, including in the property sector, and spiralling public debt.

Labour markets remain resilient but are showing signs of easing, especially in terms of wage increases. However, in some Emerging Market Economies (EMEs), unemployment rates are edging up, the report adds.

In India, real GDP growth was at a six-quarter high in Q3:2023-24, powered by strong momentum, robust indirect taxes, and lower subsidies, the RBI bulletin states. However, there is a word of caution over inflation.

“Even as inflation is on the ebb with broad-based softening of core inflation, the repetitive incidence of short amplitude food price pressures deters a swifter fall in headline inflation towards the target of 4 per cent,” the bulletin states.

This would imply that the RBI will not be in a position to reduce key interest rates to back fiscal policy in spurring growth.

Another article in the RBI bulletin which talks of seasonal factors in the Indian economy, states that the consumer price index (CPI) witnesses price pressure during the monsoon season, driven by vegetable prices while fruit prices peak during the summer months.

Compared to the pre-COVID period, seasonal variation has also increased for cash in hand and balances with RBI, production of primary goods, consumer goods, textiles, petroleum products, electricity production, passenger vehicle sales and merchandise exports, it adds