India is on track to have the world’s fastest-growing economy: RBI
The Indian economy exhibits resilience in a world plagued by worries about recession and war, according to the RBI.
The Reserve Bank of India stated on Saturday that India’s economy has remained resilient in the face of global headwinds and with inflation forecast to remain on path to become the world’s fastest-growing economy.
Expectations that rural demand will soon catch up to urban spending and solidify a recovery have increased as a result of the recent return of the southwest monsoon and fresh planting, the RBI said in a report.
“Knock-on effects of geopolitical spillovers are visible in several sectors, tapering the pace of recovery,” the central bank said.
Although it may be besieged by fears of a recession, there are sparks in the breeze that ignite the economy’s inherent resilience and set it on route to being the fastest growing economy in the world despite this enormous shock.
There was no time frame provided.
The worst of the recent spike in inflation will be past, according to RBI, if the commodity price reduction seen in recent weeks persists coupled with the easing of supply chain pressures.
According to data released last week, India’s annual consumer inflation stayed agonisingly uncomfortably above the 7% threshold and outside the tolerance band of the central bank for the sixth consecutive month.
“There is some evidence now that supply-chain pressures are peaking globally and in India, so that a major source of upward inflation pressures may be ebbing,” the bank said.
According to the Reserve Bank of India (RBI), if oil prices average $105 per barrel in 2022–2023, the current account deficit (CAD) in India might increase to 2.3% of GDP. If oil prices average $120 per barrel, the spread would grow to 2.8 percent while still being “within the sustainable limit of 3 percent.”
In 2021/22, the CAD represented 1.2% of GDP, according to figures provided in June.
“External debt remains modest as a proportion to GDP and has actually declined between March 2021 and March 2022,” RBI said.