Navigating India's Economic Growth Trajectory: Insights Into 2024 And Beyond
As the Indian economy charts a path of growth, there”s a notable buzz surrounding the prospects for the upcoming year. The Reserve Bank of India (RBI) has boldly revised its GDP growth target for FY24 to 7%, up from the earlier estimate of 6.5%. In contrast, both the International Monetary Fund (IMF) and the World Bank have pegged the growth rate at 6.3%.
This upgraded outlook is attributed to robust investment, a strengthening manufacturing sector, buoyant construction activities, and a gradual rural recovery, all of which contribute to brightening the prospects for household consumption, according to the RBI. Rural consumption is witnessing improvement, evident in higher sales of fast-moving consumer goods (FMCG). Surprisingly, automobile sales reached a new peak in November despite high interest rates, with a growing preference for high-end vehicles.
Inflation has been on a downward trajectory, with the consumer price index (CPI) inflation hovering around 5%. RBI Governor Shaktikanta Das highlighted the significant progress in curbing inflation, emphasizing the effectiveness of monetary policy. The Monetary Policy Committee opted to maintain the repo rate at 6.5% for the fifth consecutive bi-monthly meeting.
Optimism abounds as India is seen for increased stability in growth, emerging as an attractive investment destination. However, certain developments require careful monitoring, including the stance of the U.S. Federal Reserve. Indian benchmark indices touched record highs after signals from the U.S. Fed hinted at a potential departure from its interest rate-hiking policy, with rate cuts anticipated in 2024.
Despite this optimism, global uncertainties persist. Ongoing geopolitical concerns and an anticipated decline in global growth to 2.9% in 2024 raise caution. Maintaining financial stability becomes paramount to sustain growth momentum and uphold India”s position as a positive outlier in a world grappling with growth challenges.
In the space of finance, Artificial Intelligence (AI) has become ubiquitous. From boardrooms to classrooms, AI is reshaping business models, particularly in banks and insurance companies. Fintech firms are leveraging AI across various functions, including transaction monitoring, risk detection, individual and entity profiling, screening, and task automation.
For finance professionals, becoming AI-savvy is imperative in this AI-driven landscape. Starting with the basics, learning about machine learning, natural language processing, and robotics is essential. Given AI”s substantial impact on risk and compliance areas, finance professionals should focus on how AI can enhance risk detection and ensure compliance.
A survey conducted by the World Economic Forum and the Cambridge Centre for Alternative Finance indicates that a significant number of financial institutions globally are embracing AI as a business driver. Gaining expertise in AI is an ongoing process, and finance professionals are encouraged to strive for excellence, value lifelong learning, and stay abreast of the latest industry developments.
