India Q1 GDP News Live: ‘Resurgence in rural demand seen’
Moody’s has observed indications of a resurgence in rural demand, attributed to the promising outlook for agricultural production due to above-average rainfall during the monsoon period. The balance sheets of non-financial corporations and banks have shown significant improvement compared to their pre-pandemic state, with an increasing number of companies accessing equity and bond markets to raise funds.
According to Moody’s, a recent study by the RBI forecasts a substantial 54 per cent increase in private capital expenditure during the current fiscal year. The capex cycle is expected to maintain its momentum, driven by factors such as rising capacity utilisation, positive business sentiment, and the government’s sustained emphasis on infrastructure investment.
The growth dynamics are further bolstered by the rapid and extensive digitalisation of the economy, which is propelled by the government’s investments in developing digital public infrastructure, consisting of “a triad of identity, payments and data management solutions.” This digitalisation is also supported by the expanding penetration of telecom and internet services, as well as the affordability of data usage.
Moody’s highlighted the strengthening of India’s external position in recent years, as evidenced by a significant reduction in its current account deficit. Notably, the current account recorded a modest surplus in the quarter ending March 2024, marking its first surplus in 10 quarters. This achievement is primarily attributed to robust services exports and strong remittance inflows.
