The dip, however, is merely a temporary impasse despite this blip, suggests an SBI analysis, which highlights the promising boost in economic recovery, primarily fuelled by escalating rural demand—a clear indication of improving domestic income levels.
India’s economy is seeing a temporary slowdown in GDP growth, projected at around 6.5 per cent for Q2 FY25, the State Bank of India has said.
The dip, however, is a temporary impasse despite this blip.
The growth prospects for the third and fourth quarters are optimistic, with an overall GDP close to 7 per cent by the end of FY25.
Sustained rural demand is expected to boost broader economic growth.
The tailwinds of recovery are invigorated by the surge in rural demand, the bank said. This uptick is a proxy for enhanced incomes, and October has already shown signs of recovery.
Over the first half of fiscal 2024-25 (FY25), rural consumer sentiment remained above 100, gradually converging with urban sentiment levels.
Overall, sustained rural demand is expected to boost broader economic growth, ensuring a strong fiscal finish for India in FY25.
The growth prospects for the third and fourth quarters are optimistic, with an overall GDP close to 7 per cent by the end of FY25.
But there is a need to accurately capture ‘soft data’ to understand transforming consumer behaviours, especially with the rise of quick commerce in urban settings.
The SBI analysis cautions against policies that promise short-term fiscal gains, like loan waivers and universal crop price guarantees, saying these could have detrimental long-term economic consequences.
Fibre2Fashion News Desk (DS)
