RBI’s Bulletin Flags Strong Rural Revival, Industrial Growth Amid Global Uncertainty

Rural demand in India is showing signs of revival, on the back off a robust performance in the agricultural sector, according to the latest bulletin by the Reserve Bank of India (RBI).

Rural Demand Grows

The report comes amid broader hopes of a consumption-led recovery and it highlight that high-frequency indicators for May point to an uptick in rural activity.

Under the able guidance of the Deputy Governor of the central bank, Poonam Gupta, this section has been prepared to mark a shift in authorship from her predecessor Michael Patra, who previously helmed the section.

Along with a few other contributors, Gupta has provided key inputs in this month's edition which closely analyses current macroeconomic conditions and forward-looking trends.

According to the report, "high-frequency indicators of aggregate demand for May suggested a pick-up in rural demand, especially given the strong performance of the agricultural sector," and this reflects improving conditions in the country's hinterland after months of uneven recovery.

Additionally, RBI also emphasised on a positive trend in consumer sentiment surveys amid stable consumer confidence. There is also a notable improvement in optimism about the future prospects of the sector, the central bank added.

Resilient Indian Economy

The Indian economy has also remained resilient despite global economic, trade, and geopolitical uncertainties, as stated in the article "State of the economy" in the Reserve Bank of India's June bulletin.

India has showcased this resilience while the global economy is still in a state of flux, and reeling from the two-fold shock of trade policy uncertainties and a spike in geopolitical tensions.

Further, domestic inflation is also benign with headline inflation remaining below the target for the fourth consecutive month in May, the bulletin said.

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