Demand driving growth, but economic outlook ‘somewhat clouded’ by supply issues: RBI (opens original article in a new tab)

The RBI highlights that India's economic growth is driven by domestic demand, but supply-side pressures from the West Asia crisis and other factors are creating challenges, with mixed performance across sectors and labor market conditions.

• Domestic demand remains a key growth driver but supply side pressures from the West Asia crisis cloud near-term economic outlook
• RBI notes challenges in financial conditions, crude oil prices, and capital flows affecting the external sector
• Industrial activity shows resilience despite West Asia conflict, with core industries like cement and steel performing well
• Services sector remains resilient but export orders face weakness due to West Asia war and subdued tourism
• Labour market shows moderation with declining participation rates and rising unemployment, particularly in rural areas