In its monthly report, OPEC noted that India's robust growth momentum observed in 4Q23 is extending into 2024. The economy expanded by 8.4% year-on-year in 4Q23, with services growing by 7.0% and manufacturing by 11.6%. Industrial production maintained its momentum into 2024, recording a 5.7% year-on-year increase in February and 4.1% growth in January, following a 4.3% rise in December. Concurrently, consumer confidence rose to 98.5 in March from 95.1 in January, driven partly by the on-going election cycle, expected to bolster spending, particularly in rural areas. The Reserve Bank of India (RBI) kept the key repo rate steady at 6.5% in April.

While inflation is approaching the target rate of 4%, concerns persist regarding food inflation. OPEC suggests that the RBI may consider easing monetary policy given the favourable growth trajectory. Manufacturing is anticipated to be a primary driver of economic expansion in 2024, supported by government policies like the Production Linked Incentive (PLI) schemes, particularly benefiting key sectors such as electronics, pharmaceuticals, and steel. The growth forecast for India in 2024 remains unchanged at 6.6%, with continued support for manufacturing and an anticipated recovery in the agricultural sector playing vital roles in sustaining growth. For 2025, while the growth rate is expected to slightly decelerate, it is anticipated to remain robust at 6.3%.

 (Source: Business Standard)