India is in a better position than many competing economies and is likely to avoid stagflation as the rebound has gathered momentum, the Reserve Bank of India (RBI) said in its monthly state of the economy report.
“The recovery remained broadly on track. This demonstrates the resilience of the economy in the face of multiple shocks and the innate strength of macro fundamentals as India strives to regain a sustainable high growth trajectory,” the RBI’s research paper said.
It has also said that the recent RBI monetary policy actions to tame inflation could help grow a stable economy.
The results of the research are that of the authors from the RBI's economic research department and do not reflect the views of the RBI itself.
The World Bank has cautioned that several economies may face stagflation -- an economic condition of high inflation and fall in output – as the downside risks to global growth have accentuated with the risk of commodity price-driven inflation turning more generalised.
“In the midst of an increasingly hostile external environment, India is better placed than many other countries in terms of avoiding the risks of a potential stagflation,” RBI said.
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