The Reserve Bank of India, in its latest monthly bulletin, has said that the Indian economy remains resilient despite formidable global constraints and fears of a slowdown.
Despite the geopolitical spillover, “there are sparks in the air that ignite the economy’s innate strength and set it to become the fastest growing economy in the world, however beset by the fear of recession.” may,” the bulletin said. ,
The Indian economy is showing resilience and dynamism despite the geopolitical situation and high risk aversion in financial markets, stamping out portfolio investors and taking all currencies down against the incredible strength of the US dollar.
Moreover, the recent revival of the southwest monsoon and rejuvenation of sowing activity has raised hopes of another bountiful year for agricultural activity, with hopes that rural demand will soon catch up to urban spending and strengthen the recovery.
Domestic inflation coming down from its recent peak is also a source of relief.
The provisional data released by the National Statistical Office (NSO) on July 12 showed that retail inflation moderated marginally to 7.01 per cent in June.
It said that if the softening of prices in recent weeks is accompanied by an easing of supply chain pressures, the worst of the recent surge in inflation will be left behind, helping the Indian economy escape the trap of global inflation.
On the other hand, it called for a strict and constant watch on the widening trade deficit and capital outflows. India’s foreign exchange reserves have declined by about USD 40 billion in 2022.
Besides, foreign portfolio investors were net sellers in the Indian equity market for the ninth consecutive month in June.