RBI: India's Economy to Strengthen, Inflation to Ease

Mumbai, Dec 20 (PTI) Broad-based strengthening of economic activity in India will likely be sustained and retail inflation is expected to ease to 4.6 per cent in the first three quarters of 2024-25 from the latest print of 5.6 per cent, according to an article published in RBI bulletin released on Wednesday.

The pace of global growth may slow further in 2024 while disinflation at varying pace in different geographies may pave the way for interest rate reductions, said the article on the state of the economy.

"In India, the broad based strengthening of economic activity that is underway will likely be sustained by easing input costs and corporate profitability," it said.

Consumer Price Index (CPI) based inflation rose to 5.6 per cent in November as the recurrence of food price spikes punctured a brief respite in September and October.

"... but it is expected to ease to 4.6 per cent in the first three quarters of 2024-25," said the article authored by a team led by RBI Deputy Governor Michael Debabrata Patra.

It further said domestic financial markets have been lifted by the abiding strength of the real economy.

The RBI, however, said the article does not represent the views of the central bank.