RBI Sees Cautious Optimism for India’s Economy Amid Global Uncertainties

RBI Sees Cautious Optimism for India’s Economy Amid Global Uncertainties

Last Updated May - 22 - 2025, 02:58 PM | Source : Fela News

RBI’s latest bulletin highlights India’s economic resilience with easing inflation, strong exports, and robust GST collections, positioning the country as a key

The Reserve Bank of India’s latest monthly bulletin presents a cautiously optimistic outlook for India’s economy, even as global economic conditions remain uncertain due to shifting policies and ongoing vulnerabilities.
Inflation pressures have eased significantly and are expected to align steadily with targets in 2025-26. Amid global trade realignments and changing industrial policies, India is increasingly seen as a “connector country,” poised to become a vital intermediary in sectors like technology, digital services, and pharmaceuticals. The recent free trade agreement with the UK highlights strengthening bilateral trade ties.
Despite global challenges, India is well-positioned to navigate headwinds confidently, leveraging emerging opportunities and reinforcing its role as a key driver of global growth. High-frequency indicators in industrial and services sectors maintained momentum in April, and record Goods and Services Tax (GST) collections reflect underlying economic resilience. A strong rabi harvest and expanded summer crop acreage also bode well for agriculture.
India’s external sector showed resilience amid global supply chain uncertainties. Merchandise exports grew robustly in April, while services exports remained strong in March. The forex market demonstrated sufficient depth and liquidity to withstand recent pressures. The current account deficit stood at a manageable 1.3% of GDP (April-December 2024), supported by strong services exports and private remittances.
The Indian rupee has remained stable and outperformed peers during recent volatility, reflecting strong macroeconomic fundamentals and ample foreign exchange buffers.
Inflation continued to decline, with headline Consumer Price Index (CPI) inflation dropping to 3.2% in April 2025—the lowest since July 2019—driven mainly by easing food prices. Core inflation remained affected by high gold prices, but underlying inflation pressures were generally subdued.

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