GDP growth outlook remains fragile: RBI MPC member
Demand is now disproportionately dependent on household spending with other components of demand encountering headwinds: Jayanth R Varma
Biting The Bullet
♦ India should accept 4-5% inflation for several qtrs
♦ It’s as the price of avoiding a growth shock
♦ External demand is weak due to sluggish world economy
♦ Revival in pvt capex is still too tentative and muted
New Delhi: RBI MPC member Jayanth R Varma on Tuesday said that he is ‘little more’ optimistic about India’s economic growth than a few months ago, though concerns remain as the country is now ‘disproportionately’ dependent on household spending with other components of demand encountering headwinds.
Varma further said that India should be willing to accept inflation between 4 per cent and 5 per cent for several quarters as the price of avoiding a growth shock. “I am a little more optimistic about growth than I was 2-4 months ago. My cautious optimism stems from improved consumer confidence and various indicators that point to the continuation of the growth momentum,” he said in an interview.
While keeping the global growth projection for FY24 unchanged at 3 per cent, the International Monetary Fund (IMF) recently revised its growth projection for India upwards by 20 basis points to 6.3 per cent in October.
