RBI Forecasts Accelerated Household Consumption Growth In Q2

New Delhi, Sep 21 (KNN) The Reserve Bank of India (RBI) projects an increase in household consumption for the second quarter, citing easing retail inflation and a resurgence in rural demand, according to its September Monthly Bulletin released on Friday.

Retail inflation remained below the 4 per cent threshold in July and August, registering at 3.6 per cent and 3.65 per cent respectively, despite a slight uptick in the latter month.

The central bank views the sub-target inflation for two consecutive months as a positive development, while cautioning about potential vegetable price fluctuations and unfavourable base effects that may impact September's figures.

The fast-moving consumer goods (FMCG) sector is experiencing accelerated demand, with companies targeting older demographics through health-oriented products and younger consumers via premium offerings.

This trend is attributed to increasing longevity and affluence among the population.

Employment trends are also contributing to the optimistic outlook. The RBI notes increased hiring activities across various sectors in anticipation of the festive season, particularly in e-commerce.

Major online retailers are expanding their workforce not only in metropolitan areas but also in tier 2 and 3 cities.

The logistics sector is similarly ramping up recruitment to support heightened transportation, warehousing, and delivery operations.

Citing a Team Lease Services report, the RBI indicates that 62 per cent of companies in the telecom, internet service, and allied industries plan to expand their workforce this year.

The bulletin highlights the robustness of private investment, particularly in the realm of energy transition.

"Energy transition has accelerated in recent years, with the pace of clean technology deployment and capital investment surging to record levels," the report states.

As the festive season approaches, the combination of increased employment opportunities, rising consumer demand, and strategic industry investments paint a promising picture for India's economic growth in the coming quarter.

(KNN Bureau)