Weak consumption demand key vulnerability for growth: Shashanka Bhide

Shashanka Bhide, one of the three external members of the Monetary Policy Committee (MPC), on Thursday flagged a weak consumption demand as a key vulnerability for growth in the second half of the current fiscal as well as the next financial year. After more-than-expected Q2 growth which printed at 7.6 per cent on the back of a 7.8 per cent clip in Q2, the Reserve Bank in the December policy review revised upwards the FY24 growth projection by 50 bps to 7 per cent. While the government does not have an official GDP forecast number, it expects the economy to grow at 6.5-7 per cent this fiscal. "The September quarter growth at 7.6 per cent was significantly more than what we were expecting. But these numbers, even when they are more positive or favourable, require far more concern. "I believe there are vulnerabilities to this 7 per cent growth assessment. The few major growth drivers include investments that are driving growth, but we see weaker growth in consumption demand," Bhide s