RBI: India’s Economy Steady Despite Global Headwinds
India’s economy remains on firm footing amid global uncertainties, according to the Reserve Bank of India’s June bulletin. With strong domestic demand, a healthy financial sector, and calibrated policy intervention, the nation is showing resilience even as external pressures rise.
Stable Domestic Momentum
High-frequency indicators for May 2025 reveal sustained robustness in manufacturing, services, and construction sectors—signals that internal demand is compensating for global trade disruptions and economic volatility.
Controlled Inflation
Headline inflation stayed within the RBI’s comfort zone for the fourth consecutive month. Lower food price pressures, thanks to a record harvest, combined with a benign general price outlook, providing monetary policy room to support growth.
Forecast & Risks
The RBI reaffirmed its GDP forecast for fiscal year 2025–26 at around 6.5%, citing the need for vigilance amid headwinds such as geopolitical instability, rising commodity prices, and global tariff actions. Rating agency Icra projected growth at 6.2%, reflecting a similar outlook influenced by steady monsoon prospects and commodity trends.
External Buffers
With foreign exchange reserves hovering near $699 billion, India has a strong buffer against external shocks. Analysts described the economy as a rare bright spot, underpinned by disciplined fiscal and monetary frameworks.
Policy Focus Ahead
The RBI underscored the need for ongoing policy prudence. Continued liquidity support, interest rate management, and structural reforms are key to sustaining momentum. While private investment remains cautious, targeted policy initiatives are expected to catalyse renewed corporate spending.
India’s foundation is strong, but sustaining growth will depend on nimble policy responses and structural reforms to further enhance economic resilience.
