Indian Economy Demonstrates Resilience Amid Rising Global Economic Uncertainty: RBI Bulletin
Despite the escalating global economic challenges, including rising trade tensions and financial market volatility, the Indian economy continues to show resilience.
Mumbai: Despite the escalating global economic challenges, including rising trade tensions and financial market volatility, the Indian economy continues to show resilience. According to the Reserve Bank of India’s (RBI) latest monthly bulletin, the country’s economic strength is evident in the robust performance of key sectors like agriculture and steady growth in domestic consumption.
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Resilience Amid Global Challenges
The global economy is currently grappling with heightened uncertainty surrounding tariffs, escalating trade tensions, and concerns over a potential slowdown in global growth. These factors have led to volatility in global financial markets and sustained foreign portfolio outflows. However, India’s macroeconomic fundamentals remain strong, supported by a drop in the Consumer Price Index (CPI) inflation to a seven-month low of 3.6% in February 2025. This decline is primarily attributed to a correction in food prices.
Sustained Economic Growth Driven by Strong Domestic Demand
India’s economic outlook remains positive, with key indicators pointing to continued growth. Private consumption expenditure is rising, signaling strong consumer confidence and sustained demand across various sectors. Government spending on infrastructure has also picked up pace, further boosting economic activity. The report highlights that sectors such as construction, financial services, and trade continue to thrive, contributing to the overall economic stability.
Impressive GDP Growth and Sectoral Performance
The first revised estimates for India’s GDP in 2023-24 revealed a growth rate of 9.2%, the highest in over a decade, excluding the post-COVID recovery period. This impressive growth underscores India’s role as a beacon of stability in a world marked by uncertainty. The agriculture sector has shown strong performance, with upward revisions in production estimates for foodgrains and oilseeds for the Kharif season of 2024-25. Rabi foodgrains also saw a 2.8% growth, driven by above-normal rainfall and favorable reservoir conditions.
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Manufacturing and Services Sectors Maintain Momentum
Although the manufacturing sector experienced a slight dip in momentum, there was a notable increase in purchasing activity and employment in February 2025. Meanwhile, the services sector continued to expand, with strong growth in new businesses and employment, further supporting the economy’s overall growth trajectory.
Challenges Amid External Pressures
Despite the positive trends, the bulletin also noted that the ongoing external challenges, such as sustained foreign portfolio outflows, have put pressure on domestic equity markets and contributed to currency depreciation. These challenges highlight the need for continued vigilance in managing external economic pressures while maintaining domestic economic stability.
In conclusion, the RBI’s bulletin reflects a strong and resilient Indian economy that continues to thrive despite global uncertainties. With robust domestic demand, strong agricultural performance, and steady growth in key sectors, India remains on a growth trajectory, reinforcing its economic strength on the global stage.
