CURRENT AFFAIRS: BANKING & FINANCE
Private Consumption Resumes as Key Driver of Domestic Demand: Reserve Bank of India
- As per the Reserve Bank of India’s (RBI) article ,the slowdown in the second quarter of FY 2024-25 has been overcome, with private consumption once again driving domestic demand.
- Festival-related consumption and a recovering agriculture sector are contributing to the economy’s resilience.
Key Highlights :
- Inflation Concern:The article emphasizes the need to reduce inflation to allow India to reach its growth potential.
- In October 2024, the Consumer Price Index (CPI) surged to a 14-month high of 6.21%, higher than 5.5% in September.
- Core inflation is also rising, along with a surge in food prices, including edible oils and processed foods, which affects household services and wages.
- Rural India and E-Commerce:Rural India is emerging as a key market for e-commerce, driven by increased kharif output and positive expectations for rabi production.
- E-commerce companies are targeting rural areas, especially with festival season sales.
- Retail Sector Performance:Retailers are witnessing a pickup in sales growth after the second quarter, with significant demand during festivals like Diwali.
- Premiumisation is visible, with luxury items, such as premium two-wheelers and luxury cars, gaining traction.
- Urban Growth:The urban population is expected to increase significantly, with half of India’s population projected to live in cities by 2025, further boosting urban demand.
