Slow consumption spoils GDP party
Household consumption in FY24 is likely to grow at the slowest pace in last two decade
NEW DELHI: The first advance estimate of 2023-24 GDP has sprung a positive surprise, with the economy predicted to grow at 7.3% during the year. However, slow private consumption growth remains a cause of concern. Private consumption in FY24 is likely to grow at 4.4%, lowest in the past 20 years (barring the Covid year of 2020-21). This, despite the fact the GDP growth has been better than expected, raising fear that the growth is not reaching all sections of the society.
Data belies govt claims
The first advance estimates of FY24 GDP numbers by the National Statistical Office (NSO) belies the claims made by the RBI and the finance ministry. In its November monthly economic review, the ministry had claimed while urban consumption continued to grow, rural demand has shown a strong pick-up. “These trends signal continued momentum in coming months,” added the report.
RBI Governor Shaktikanta Das, when asked about slow uptick in rural consumption in his post-monetary policy press briefing on December 8, had told the media: “Despite late start, Rabi sowing had completed 2/3rd this season, two-wheelers sales have seen a turnaround this festive season with 20.7% growth over the previous year. FMCG sales in rural areas have shown steady demand since April of FY24 and in Q2 they have shown a growth of 6.4%. Demand for MNREGS for the first time declined in November this year by 4%.”
Comments are closed.