RBI Report Highlights India's Resilient Growth Amid Global Uncertainty

(MENAFN- KNN India) New Delhi, Mar 20 (KNN) India's economy continues to demonstrate remarkable resilience in the face of global economic uncertainty, according to the Reserve Bank of India's State of the Economy report.

The country's growth trajectory remains robust, supported by strong agricultural output and recovering consumption patterns, positioning India as a beacon of stability in an uncertain global landscape.

Multiple key sectors including agriculture, construction, financial services, and trade are exhibiting buoyant performance, contributing to the overall economic strength.

The report highlights that India is benefiting from several positive factors, including easing inflation, robust tax revenue collection, and sustained momentum in services exports.

The RBI has responded proactively to address liquidity shortages in the financial system.

According to the report, the central bank has injected over Rs 5.3 lakh crore of durable liquidity through various monetary instruments, including bond repurchases, forex swaps, and long-term repos, ensuring adequate financial system stability.

The report underscores India's impressive economic performance, noting that "the first revised estimates (FRE) of GDP for FY24 placed the real GDP growth at 9.2 percent - the highest in over a decade if we exclude the post-Covid rebound - demonstrating that in an uncertain world, India's growth story remains a beacon of stability and progress."

Inflation pressures have moderated significantly, with headline Consumer Price Index (CPI) falling to a seven-month low of 3.6 percent in February.

The report suggests that "the decline in overall inflation is expected to further support recovery in consumption and bolster macroeconomic strength, which would act as a bulwark to ward off the myriad of external challenges."

Leading economic indicators point to sustained robust demand in the final quarter of FY25.

The report notes that "activity indicators such as e-way bills and toll collections recorded double-digit (y-o-y) growth in February 2025," reflecting strong economic activity across sectors.

Despite the positive outlook, the RBI report acknowledges several risks to the economic forecast. It identifies escalating global trade tensions, tariff uncertainty, and a potential global economic slowdown as key threats to India's growth trajectory.

The report cautions that India remains vulnerable to external shocks through various channels, including trade flows, capital movements, and currency fluctuations.

It further warns that ongoing geopolitical tensions and protectionist policy measures could potentially dampen growth prospects and exert upward pressure on inflation.

The report specifically notes that "the reverberations of a tumultuous external environment, however, are being reflected in sustained foreign portfolio outflows," highlighting the interconnected nature of global economic challenges.

(KNN Bureau)

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