The rising pace of local economic activities along with stronger corporate sector balance sheets and efficient financial system has brightened the prospects of the Indian economy while the persistent core inflation above 5% and a potential volatility in the global financial system could pose risks to the growth trajectory, the Reserve Bank of India said in its financial stability report.
"The Indian economy presents a picture of resilience, supported by strong macroeconomic fundamentals. Sustained growth momentum, moderating inflation and anchoring of inflation expectations, a narrowing current account deficit and rising foreign exchange reserves, ongoing fiscal consolidation and a robust financial system are setting the economy on a path of sustained growth," RBI said.
Headline inflation measured by Consumer Price Index has gradually moderated to 4.25% in May from its peak of 7.8% in April last year, owing to monetary tightening and removal of supply side bottlenecks locally as well as globally. Current account deficit in the January-March quarter narrowed to $1.3 billion, which is 0.2% of the GDP while forex reserves are now closer to $600 billion.
The world's fifth largest economy is positioned to be among the fastest growing major economies despite multiple global headwinds.
Read more at: https://economictimes.indiatimes.com/news/economy/indicators/indias-economic-prospects-brighten-core-inflation-global-volatility-may-pose-risks-rbi-financial-stability-report/articleshow/101342633.cms
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