“Data which is coming in is mixed. But the positives outweigh the negatives and, by and large, underlying activities remain strong,” Shaktikanta Das, governor of the Reserve Bank of India, said at the BFSI Insight Summit hosted by Business Standard.
The comments come amid poor show of corporate earnings for the second quarter, which have shown signs of weakness in urban consumption, with fast moving consumer goods (FMCG) firms reporting flat or declining volume growth.
However, Das also said that he would not “rush to say the Indian economy is slowing”.
Further, India’s purchasing managers index for manufacturing and services, which are the high-frequency indicators, slowed in September but bounced back in October.
The RBI, last month, retained its growth forecast for the current financial year at 7.2 per cent.Earlier, the Monthly Economic Survey for September also suggested that the volume sales of FMCG indicate that rural demand continues to improve, while urban demand has moderated. Contrary to rural demand, there has been evidence of a slowdown in urban demand as reflected in the performance of various indicators during first half of FY25, the survey said. “Volume growth in urban FMCG sales has moderated from 10.1 per cent in Q1 of FY24 to 2.8 per cent in Q1 of FY25.”However, the FinMin survey, like several companies, pointed out that the ongoing festive season and improvement in consumer sentiments “may boost urban consumer demand.”