India's prospects of FY24 macroeconomic stability, growth sound: Govt

But the price of such stability and growth is eternal policy vigilance, it noted.

However, cross-border spillovers and adverse global developments may deter the potential high growth path, it cautioned in the June edition of its Monthly Economic Review.

The emphasis on capital expenditure in recent years by the government has given a much-needed thrust to investments in key infrastructure, which has resulted in crowding in of private investment to kick-start the virtuous circle of job creation, income, productivity, demand and exports, supported by favourable demographic dividend over the coming years, it said.

Consumer-price index-based core inflation has stayed below the 6 per cent mark for four consecutive months.

The country’s exports are also expected to perform well, driven by strong performance in services exports, despite adverse global developments, it noted.

With an easing of supply chains and a decline in global commodity prices, the trade deficit is expected to improve further in the coming years, it said.

As the price of Brent crude is up by nearly 20 per cent from its recent lows, monetary tightening in the developed world may have further to run, and that will affect the monetary policy trajectory in developing countries, too, due to currency and capital flow effects, it added.

Fibre2Fashion News Desk (DS)