“Calibrated policy support can help India turn global volatility into an opportunity and strengthen its position in the emerging world economic landscape. India’s consistent strength in services exports and remittance inflows continues to provide a vital buffer for the current account,” said RBI researchers in their latest assessment of the economy. These views are not necessarily those of the central bank, the RBI said.
Economy Resilient
The Indian economy continues to remain resilient on strong domestic growth impulses and sound macro-fundamentals despite strong global headwinds emanating from trade tensions, the report said. Consumers and businesses remain optimistic regarding the economic outlook pointed to the surveys conducted by the central bank.
Headline CPI inflation declined to a 67-month low of 3.3% in March 2025, mainly due to the continued moderation in food prices. Core inflation (CPI excluding food and fuel), however, remained steady at 4.1%, with gold contributing 22.8 per cent. Recent decline in global commodity prices on account of an expected slowdown in global growth has eased some of the pressures from imported inflation.
The report warned that going forward, global financial conditions are likely to remain volatile and emerging market economies are vulnerable to feedback loops and spillovers that may lead to reigniting of global inflation.
Easing Pressure
Decline in global commodity prices, however, could ease pressure on inflation in commodity importing countries, although currency pressures could partly offset such benefits.India’s strength to withstand these headwinds stem from its robust growth fostered by a strong macroeconomic framework and moderating inflation, with strong domestic engines of growth.
Content Source: economictimes.indiatimes.com