The Indian economy is showing resilience despite elevated trade and tariff-related uncertainties, the Reserve Bank of India said in its May monthly bulletin.
Various high-frequency indicators of the industrial and services sectors sustained their momentum in April, said the central bank.. "A bumper rabi harvest and higher acreage for summer crops, coupled with favourable southwest monsoon forecasts for 2025, augur well for the agriculture sector."
Headline CPI inflation fell for the sixth consecutive month to its lowest since July 2019, primarily driven by the sustained easing in food prices. Domestic financial market sentiments, which remained on edge in April, witnessed a turnaround since the third week of May.
Meanwhile, global growth continues to face headwinds, with persistent trade frictions, heightened policy uncertainty, and weak consumer sentiment weighing on the outlook, according to the central bank.
Though the tariff pause has provided a temporary let off, the global outlook remains "fragile", as per RBI.
In its April 2025 World Economic Outlook, the International Monetary Fund (IMF) trimmed global growth forecasts for 2025 and 2026 from its January projections citing escalating trade tensions and policy uncertainty. Growth in emerging market and developing economies (EMDEs) is also projected to decelerate with emerging and developing Asia significantly impacted by the tariffs.
Going forward, financial turbulence is seen as a major downside risk to growth projections, the central bank said.
Various high-frequency indicators of the industrial and services sectors sustained their momentum in April, said the central bank.. "A bumper rabi harvest and higher acreage for summer crops, coupled with favourable southwest monsoon forecasts for 2025, augur well for the agriculture sector."
Headline CPI inflation fell for the sixth consecutive month to its lowest since July 2019, primarily driven by the sustained easing in food prices. Domestic financial market sentiments, which remained on edge in April, witnessed a turnaround since the third week of May.
Meanwhile, global growth continues to face headwinds, with persistent trade frictions, heightened policy uncertainty, and weak consumer sentiment weighing on the outlook, according to the central bank.
Though the tariff pause has provided a temporary let off, the global outlook remains "fragile", as per RBI.
In its April 2025 World Economic Outlook, the International Monetary Fund (IMF) trimmed global growth forecasts for 2025 and 2026 from its January projections citing escalating trade tensions and policy uncertainty. Growth in emerging market and developing economies (EMDEs) is also projected to decelerate with emerging and developing Asia significantly impacted by the tariffs.
Going forward, financial turbulence is seen as a major downside risk to growth projections, the central bank said.
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