Revival in rural consumption: RBI article

Mumbai: Aggregate demand conditions are gathering momentum with a revival in rural consumption and are expected to reinvigorate the private sector investment, an article published in the RBI’s latest Bulletin said.

Persistent geopolitical tensions, rekindled fears of a potential recession in key economies and financial market volatility in response to monetary policy divergence cast a shadow on global economic prospects even as inflation moderated grudgingly across countries, the article on 'State of the Economy' written by a team led by Reserve Bank Deputy Governor Michael Debabrata Patra said.

“In India, aggregate demand conditions are gathering momentum with a revival in rural consumption on the back of growing incomes. This stimulus to demand is expected to reinvigorate the hitherto subdued participation of the private sector in total investment,” the article said.