Reserve Bank Governor Shaktikanta Das stated on Wednesday that the latest economic growth data presents a “mixed” picture; however, he emphasized that the positive indicators surpass the negative ones.
During his address at Business Standard’s annual BFSI event, Das highlighted that the fundamental economic activities remain robust overall.
“The incoming data is mixed, but the positives outweigh the negatives, and fundamentally, the underlying activities are strong,” Das remarked.
It is important to note that numerous analysts have expressed concerns regarding growth, particularly following the release of official data indicating a decline to a 15-quarter low of 6.7 percent in the first quarter of FY25.
Nevertheless, the RBI continues to maintain its forecast of 7.2 percent real GDP growth for FY25, despite some expectations of a figure below 7 percent.
Das explained that the RBI monitors over 70 high-frequency indicators to formulate its estimates, detailing both the positive elements contributing to growth and the negative factors hindering it.
Negative influences include the industrial production index (IIP) data and a decrease in urban demand observed by fast-moving consumer goods companies. Furthermore, increased subsidy expenditures in the September quarter are expected to affect the Q2 GDP figures, Das noted.
Conversely, positive developments encompass significant growth in GST e-way bills, toll collections, air passenger traffic, and the performance of the steel and cement industries, according to Das.
In light of recent discussions regarding the auto sector, particularly concerns about rising inventory levels amid declining demand, Das pointed out that the sector has performed exceptionally well in October, achieving a 30 percent growth, which includes a 23 percent increase in four-wheeler sales.
Additionally, he mentioned that both the agriculture and services sectors are also performing well.
“I would not hastily conclude that the economy is experiencing a slowdown,” the RBI governor stated, countering some analysts’ claims that the economy is undergoing a cyclical growth slowdown.
