The Indian economy remains resilient despite global economic, trade, and geopolitical uncertainties, according to an article "State of the economy" in Reserve Bank of India's June bulletin.
The global economy is in a state of flux, reeling from the twin shocks of trade policy uncertainties and a spike in geo-political tensions, the article said. "In this state of elevated global uncertainty, various high-frequency indicators for May 2025 point towards resilient economic activity in India across the industrial and services sectors."
Domestic inflation remains benign with headline inflation remaining below the target for the fourth consecutive month in May, the bulletin said.
"Record domestic crop production in 2024-25 agricultural season is translating into a sharp and sustained easing of food price inflation. Steady core excluding food and fuel inflation, with indications of some softening after excluding the impact of volatile and elevated gold and silver prices, indicates that underlying inflationary pressures remain muted."
The optimism from a temporary tariff freeze and trade deals has kept financial market sentiments buoyed in May and early-June 2025, the article said.
However, following the outbreak of the Iran-Israel conflict, heightened uncertainty and volatility have once again gripped financial markets, it stated.
It is important to note that the views expressed in the RBI Bulletin articles are of the authors and do not
represent the views of the Reserve Bank of India.
The global economy is in a state of flux, reeling from the twin shocks of trade policy uncertainties and a spike in geo-political tensions, the article said. "In this state of elevated global uncertainty, various high-frequency indicators for May 2025 point towards resilient economic activity in India across the industrial and services sectors."
Domestic inflation remains benign with headline inflation remaining below the target for the fourth consecutive month in May, the bulletin said.
"Record domestic crop production in 2024-25 agricultural season is translating into a sharp and sustained easing of food price inflation. Steady core excluding food and fuel inflation, with indications of some softening after excluding the impact of volatile and elevated gold and silver prices, indicates that underlying inflationary pressures remain muted."
The optimism from a temporary tariff freeze and trade deals has kept financial market sentiments buoyed in May and early-June 2025, the article said.
However, following the outbreak of the Iran-Israel conflict, heightened uncertainty and volatility have once again gripped financial markets, it stated.
It is important to note that the views expressed in the RBI Bulletin articles are of the authors and do not
represent the views of the Reserve Bank of India.
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