According to a report released by the Reserve Bank of India (RBI), there is a global economic slowdown, with resilient economies experiencing a deceleration in growth. However, India has defied this trend, registering a six-quarter high in real GDP growth in Q3:2023-24. This growth was attributed to strong momentum, robust indirect taxes, and reduced subsidies. The report suggests that future growth will be supported by structural demand visibility and healthier corporate and bank balance sheets. Despite a softening in core inflation, the report notes that recurring short-term food price pressures are hindering a rapid decline in headline inflation towards the 4% target.
The report also includes an article authored by Nishant Singh and Binod B. Bhoi, which examines global inflation trends post-COVID-19. It explores the impact of pandemic-induced fiscal expansions on inflation in advanced and emerging market economies.
The study reveals that economies with larger fiscal expansions experienced higher inflation outcomes in the post-pandemic period, while moderate fiscal support led to relatively moderate inflation outcomes. In India, post-pandemic fiscal support did not significantly contribute to higher inflation.
Additionally, the report features an article discussing the impact of COVID-19 on the seasonal adjustment of macroeconomic data in India. It highlights the seasonal peaks and patterns observed in various indicators, such as industrial production, monetary/banking, payment system indicators, merchandise trade, and services. The article notes that seasonal variation has increased for several indicators compared to the pre-COVID period.
