The Reserve Bank of India (RBI) has warned that escalating trade tensions and global financial market volatility are testing economic resilience worldwide.However, despite these challenges, India’s economy continues to demonstrate strength, driven by robust agricultural performance and rising consumption, according to the central bank’s March 2025 bulletin.
“The resilience of the global economy is being tested by escalating trade tensions and a heightened wave of uncertainty around the scope, timing, and intensity of tariffs. While engendering heightened volatility in global financial markets, these have also caused apprehensions about the slowdown in global growth,” the bulletin stated.
The RBI noted that policymakers are navigating a delicate balance between the inflationary effects of tariffs and currency depreciation on one side and the deflationary impact of an economic slowdown on the other.Also read: RBI is said to ask banks to cut offshore forwards for arbitrageDespite sustained foreign portfolio outflows, India’s macroeconomic fundamentals remain strong.An article on ‘State of the Economy’ published in the bulletin pointed to a decline in headline Consumer Price Index (CPI) inflation to a seven-month low of 3.6% in February 2025, mainly due to falling food prices.The RBI clarified that the views expressed in the bulletin are those of the authors and do not necessarily reflect its official stance.
Source link
