Growth questions

Some indicators remain puzzling

- 

The latest Monthly Bulletin of the Reserve Bank of India (RBI) has noted high-frequency indicators suggest continued growth in demand, but at a slow momentum compared to the preceding quarters. While the central bank has retained its annual growth projection for the ongoing year at 7.2 per cent, prospects are being debated. As the Bulletin also noted, corporate results in the first quarter of 2024-25 showed a deceleration in real gross value added and corporations seem to be protecting margin with lower spending.

Some of the large fast-moving consumer goods companies in recent days have expressed concern over slowing urban demand, which contributes to the bulk of their sales. Fortunately, rural demand seems to be growing and a good monsoon should help improve the outlook. Overall, the recent decline in the stock markets is also partly explained by weak corporate performance.