India’s growth momentum in 2023-24 is expected to be sustained due to sound macroeconomic policies and softer commodity prices, according to the Reserve Bank’s annual report. The report acknowledges potential downside risks such as slowing global growth, geopolitical tensions, and financial market volatility. It highlights the factors contributing to India’s growth, including robust financial and corporate sectors, fiscal policy focus on quality expenditure, and new growth opportunities from global supply chain realignment.
The RBI’s monetary policy aims to withdraw accommodation while supporting growth and aligning inflation with the target. The report predicts a decrease in headline inflation to 5.2% in 2023-24. The current account deficit is projected to remain moderate, supported by strong services exports and lower commodity prices. The RBI also expects volatility in foreign portfolio investment flows due to global uncertainties. Furthermore, the RBI plans to expand its pilots for the central bank digital currency (CBDC) by incorporating more use cases and features in both CBDC-Retail and CBDC-Wholesale.
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