India economic growth to be sustained by consumer spending rebound, says govt: Report

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Reuters | | Posted by Aryan Prakash

A sharp rebound in consumer spending and rising employment will sustain economic growth in India in the months ahead, the government said in its monthly economic review for August published on Saturday.

It said an increase in private consumption and higher capacity utilisation rates had helped private-sector capital expenditure reach one of its highest levels in the last decade.

Business investment has been encouraged by government spending which climbed 35% in April-August compared to the same period a year ago, the report said, adding that tax revenue growth for the government had been buoyant.

The report also said high levels of foreign exchange reserves, sustained foreign direct investment and strong export earnings have provided a reasonable buffer against monetary policy normalisation in advanced economies and the widening of the current account deficit arising from geopolitical conflict.

India is in a better position to calibrate its liquidity levels without abruptly stalling growth, the report said, adding that inflationary pressures in the country appear to be declining.

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