New Delhi: The Reserve Bank of India (RBI) reported on Wednesday that the Indian economy is showing resilience despite fluctuations in global markets. The report highlighted strong performance in the agriculture sector and a rise in domestic consumption.
The central bank also noted that India's macroeconomic stability is reinforced by a drop in headline Consumer Price Index (CPI) inflation, which fell to a seven-month low of 3.6 percent in February 2025, largely due to a decrease in food prices.
However, escalating trade tensions and increased uncertainty regarding tariffs are challenging the resilience of the global economy.
The RBI pointed out that heightened volatility in international financial markets has raised concerns about a potential slowdown in global growth.
"Despite these challenges, the Indian economy remains resilient, as evidenced by the strong performance of the agriculture sector and improving consumption," the RBI stated.
The 'State of the Economy' section of the RBI's monthly report also highlighted a rise in foreign fund outflows.
The RBI observed that the impacts of a turbulent external environment are reflected in ongoing foreign portfolio outflows.
Since October, foreign investors have been withdrawing funds aggressively, leading to significant declines in the benchmark stock indices, Sensex and Nifty, from their record highs.
Nonetheless, the Indian economy continues to show resilience in this challenging global landscape, supported by strong sectoral performance and positive consumption trends.
The Second Advance Estimates (SAE) published by the National Statistics Office (NSO) indicate a consistent growth rate of 6.5 percent for the fiscal year 2024-25.
Recent quarterly figures highlight this trend, showing a 6.2 percent increase in real GDP for Q3:2024-25, overcoming the sluggish performance of the prior quarter.
According to the RBI, "Private consumption expenditure is rising, reflecting robust consumer confidence and ongoing demand. Additionally, government spending has notably increased in recent months, further boosting growth."
"Key sectors such as construction, financial services, and trade remain strong, serving as foundations of economic resilience. Various high-frequency economic indicators suggest that growth momentum will continue into Q4 as well."
The RBI report also noted that recent developments across multiple sectors support the view of a sequential increase in growth momentum.
