“Lead indicators of economic activity point to sustained resilience of the Indian economy in an uncertain and increasingly hostile global environment,” the RBI said.
India, which has recently overtaken the UK to be the fifth largest economy, is expected to clock 6.1% GDP growth in the September quarter.
“If this is realised, India is on course for a growth rate of about 7% in 2022-23. In Q3, supply responses in the economy are gaining strength,” the report said.
The views presented in the report are, however, not of the central bank but of the researchers headed by deputy governor Michael D Patra, the RBI said.
Recent data from the far side of the Atlantic and in India suggest a grudging let-up in inflationary pressures. Inflation has somewhat eased across BRICS economies and in several other emerging market economies as well, benefiting from lower commodity prices, especially food.
This led to a turn in the thinking of central banks – some of them have slowed rate increases, and indicated that the end of rate raising is in sight, the report observed.
“Some of them are delivering ’75s’ but assuaging them with dovish pivot after its 75 bps hike. Lags in the transmission of monetary policy create the risk that they may ease off too soon as they see the outlook becoming darker, as set out earlier,” said the report.
However, in its latest Global Financial Stability Report, the International Monetary Fund highlighted two major risks to global financial stability – disorderly tightening of financial conditions; and debt distress among emerging and frontier economies.
