India's economic growth momentum to continue in Q1 FY25: Ministry

Industrial activity is gaining momentum. This is clear from improving industrial capacity utilisation and volume indicators like the index of industrial production and purchasing managers’ index (PMI) for manufacturing.

With capacity utilisation in the manufacturing sector rising above the long-term average, the rise in new investment announcements by the private sector was positive for growth, the ministry noted in the review report.

“The emerging robust trends in important high-frequency indicators of growth like the GST (goods and services tax) collections, e-way bills, electronic toll collections, sale of vehicles, purchasing managers’ indices and the value and number of digital transactions attest to the growing strength of the economy,” the review said.

Geopolitical tensions may, however, drive up international commodity prices and disrupt supply chains, the review cautioned.

Retail inflation clocked 4.83 per cent in April this year, the lowest in the past 11 months. Assuming a positive monsoon, the Reserve Bank of India has predicted a 4.9 per cent retail inflation rate for Q1 FY25.

“The future inflation path will be shaped by several elements. The positive indications in the farm sector should help India firewall against any adverse pressures that may arise from geopolitical tensions and global commodity prices,” the document said.

The forward-looking surveys of the central bank also indicate improving consumer confidence and industrial outlook, the document noted.

While the urban unemployment rate declined year on year during Q4 FY24, the labour force participation rate and worker-to-population ratio have improved. Formal jobs are rising as well, the document added.

Fibre2Fashion News Desk (DS)