In spite of recent geopolitical tensions, India’s growth outlook is supported by robust domestic engines, Reserve Bank of India (RBI) said on Monday.

The global economy remained resilient in the first half of 2024, with declining inflation supporting household spending, it said in its October Bulletin.

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It noted that some high-frequency indicators have, however, shown a slackening of momentum in the second quarter of 2024-25, partly attributable to idiosyncratic factors like unusually heavy rains in August and September. “In parallel, there are other high frequency indicators which show steady growth. Consumption spending is shaping up for a festival season revival, especially in small towns and lower tier cities. Despite high prices tempering some of the enthusiasm, many buyers are prioritising discounts,” the article said.

Consumer spending is expected to be about 25 per cent higher than during Dussehra-Diwali last year. This is expected to be driven by off-line retail, followed by the online channel, it added.

According to RBI, private investment is showing some encouraging lead indicators, although the slack continues. Corporates results for the first quarter of 2024-25 had shown a deceleration in real gross value added by non-government non-finance companies.

There is a view gaining ground that the time for private investment is now; delay risks loss of competitiveness. The stage is set for the private sector to deploy capital and invest in growth, build capacities, create employment and improve efficiencies.

RBI Bulletin further said the corporate India needs to reinvest its profits to digitize the production value chain with the goal of designing, building and selling innovative products and services that cater to the needs of the increasingly differentiating Indian consumer. In conjunction with schemes announced in Union Budget 2024-25, it also needs to invest in an employable manufacturing work force, it added.