India’s economy is showing signs of a strong recovery in late 2024-25, as per the RBI’s latest bulletin. Key indicators like vehicle sales, air travel, and GST E-way bills suggest rising economic activity. However, global risks, including a strong US dollar and foreign outflows, pose challenges.

BulletsIn

• Economic activity picking up; vehicle sales, air travel, and steel consumption rising.
• Rural demand remains strong due to a robust agricultural sector.
• Urban spending may get a boost from lower inflation, tax relief in Budget.
• Foreign investors pulled out $6.7B in Jan 2025; equity outflows at $8.4B.
• Rupee weakened 1.5% last month but fared better than other currencies.
• FDI inflows up 20.6% to $62.5B (Apr-Dec 2024).
• Public sector banks handling more transactions; UPI failures declining.
• Global risks: Strong US dollar, inflation worries, trade policy shifts.
• RBI’s Economic Activity Index tracking 27 indicators points to steady growth.