As per the Reserve Bank of India's Annual Report, which was released on May 30, India's growth momentum is projected to be continued in 2023–24 in an environment of lowering inflationary pressures due to prudent macroeconomic policies and lower commodity prices.
However, it also stated that sluggish global development, ongoing geopolitical unrest, and a potential increase in financial market volatility as a result of fresh stress events in the world financial system could be threats to growth.
India's growth momentum is likely to be sustained in 2023–24 in an environment of easing inflationary pressures, according to the report. "On the back of sound macroeconomic policies, softer commodity prices, a robust financial sector, a healthy corporate sector, continued fiscal policy thrust on quality of government expenditure, and new growth opportunities stemming from global realignment of supply chains," it said.
In addition, the RBI's monetary policy remains focused on removing accommodation to ensure that inflation gradually aligns with the objective, while fostering growth, according to its Annual Report for 2022–2023, a statutory report of the Central Board of Directors.
"With a stable exchange rate and a normal monsoon, unless an El Nino event strikes, the inflation trajectory is expected to move down over 2023-24, with headline inflation edging down to 5.2% from the average level of 6.7% recorded last year," the report said..
The current account deficit (CAD) is predicted to remain modest in the external sector, supported by strong services exports and the positive effects of low import commodities prices. Foreign portfolio investment (FPI) flows "may remain volatile with the persistence of global uncertainties," the RBI said.
The RBI stated that it intends to expand the ongoing CBDC (central bank digital currency) -Retail and CBDC-Wholesale pilots during the current fiscal year by including diverse use cases and functionalities. It was also planned to incorporate new sites and participating banks in the CBDC-Retail pilot programme.
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