Unlocking Insights: RBI’s Monthly Bulletin February 2024

Unlock valuable insights into the economic landscape with RBI’s Monthly Bulletin February 2024. Explore key articles, analyses, and trends for informed decision-making.

The Reserve Bank of India (RBI) has unveiled the highly anticipated February 2024 issue of its Monthly Bulletin, offering a wealth of insights into the economic landscape. This edition comprises a monetary policy statement, five impactful speeches, and four thought-provoking articles, complemented by current statistics, providing a comprehensive overview of recent trends and developments.

RBI’s Monthly Bulletin February 2024: Key Articles:

I. State of the Economy:

Within RBI’s Monthly Bulletin February 2024, the global economic outlook shines bright, with optimism for stronger-than-expected growth in 2024. India’s economic momentum remains robust, supported by encouraging high-frequency indicators. The Bulletin notes expectations of increased corporate sector capital expenditure, fueling optimism for future growth. Notably, consumer price inflation has moderated, while core inflation stands at its lowest since October 2019.

RBIs Monthly Bulletin February 2024

II. The Shape of Growth Compatible Fiscal Consolidation:

In the RBI’s Monthly Bulletin February 2024, authored by Michael Debabrata Patra, Samir Ranjan Behera, Harendra Kumar Behera, Shesadri Banerjee, Ipsita Padhi, and Saksham Sood, this article emphasizes the importance of prioritizing developmental expenditure in India to foster medium-term complementarities between fiscal consolidation and growth. Utilizing a dynamic stochastic general equilibrium (DSGE) model, the article outlines a fiscal consolidation trajectory by directing government expenditure towards employment-generating sectors, climate risk mitigation, and digitalization.


  • The Interim Budget for 2024-25 targets a gross fiscal deficit of 5.1 percent of GDP in 2024-25, aligning with the goal of 4.5 percent of GDP by 2025-26. Capital expenditure has been bolstered post-pandemic, with its share increased to 3.4 percent of GDP.
  • Empirical findings underscore the medium-term benefits of judicious fiscal consolidation, outweighing short-run costs. Investments in social and physical infrastructure, climate mitigation, digitalization, and skill development can yield sustainable growth dividends.
  • Utilizing a dynamic stochastic general equilibrium model, the analysis predicts a substantial decline in the general government debt-GDP ratio to 73.4 percent by 2030-31 if government expenditure is directed towards the aforementioned sectors.

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III. Headline and Core Inflation Dynamics:

In the RBI’s Monthly Bulletin February 2024, written by Asish Thomas George, Shelja Bhatia, Joice John, and Praggya Das, this article delves into the impact of significant supply-side shocks on the inflation process since 2020, including those triggered by COVID-19, the war in Ukraine, and adverse climatic events. It compares the desirable properties of various Consumer Price Index (CPI) core inflation measures, such as ease of communication, equality of means, lower variance, predictability, co-integration, unbiasedness, and attractor condition, during the full sample period from January 2012 to December 2023, against the pre-COVID period, to assess their effectiveness in capturing underlying inflation movements.


  • Various core inflation measures, including exclusion-based, trimmed means, reweighted CPI, and trend CPI, maintained their desirable properties compared to the pre-COVID period.
  • Since early 2020, multiple supply-side shocks, particularly in the food and energy sectors, have resulted in some degree of persistence in headline inflation. This has led to spillovers from non-core to core inflation, thereby weakening certain properties of core inflation. However, in the long run, non-core inflation still tends to converge to core inflation.

IV. Evolving Business Sentiments:

In the RBI’s Monthly Bulletin February 2024, authored by Abhilash Arun Satape, Nivedita Banerjee, and Supriya Majumdar, this article explores the significance of business tendency surveys, such as the Services and Infrastructure Outlook Survey (SIOS) conducted by the Reserve Bank of India, in extracting forward-looking signals about potential movements in related macro variables. It provides insights into the behavioral changes observed in various qualitative parameters captured in the SIOS from Q1:2014-15 to Q2:2023-24.


  • Results demonstrate the efficacy of the SIOS as a forward-looking assessment tool, establishing a robust connection between survey parameters and macroeconomic variables. Survey responses offer valuable lead information for understanding the evolution of output and prices in the services and infrastructure sectors.
  • Assessments by respondents on the overall business situation play a crucial role in nowcasting sector-specific growth trajectories, while expectations regarding selling prices provide valuable inputs for inflation forecasting.
  • Despite challenges stemming from the pandemic and subsequent external shocks, both the services and infrastructure sectors exhibited a gradual rebound as businesses reopened and restrictions eased. The survey’s captured perception of business entities indicates a recovery of confidence in the economy post-COVID, despite differences in the nature of business between sectors covered in the SIOS.

The February 2024 RBI Bulletin provides a wealth of insights, offering policymakers, investors, and stakeholders a nuanced understanding of recent economic trends. Stay informed with the latest analyses and forecasts shaping India’s economic landscape.

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