India's Economic Resilience Amid Global Uncertainty: RBI Bulletin Highlights

India's economic landscape appears robust, as indicated by high-frequency data across various sectors, despite global economic unpredictability, according to the Reserve Bank of India (RBI). The central bank's monthly bulletin points to a benign domestic price situation, with inflation remaining under control for the fourth consecutive month in May. In its economic assessment, the RBI emphasized that favorable financial conditions are facilitating effective transmission of recent rate cuts to the credit market. The central bank has reduced the repo rate by 50 basis points, aiming to stimulate economic growth. The RBI also noted that while the U.S. administration's temporary tariff freeze has lifted financial market spirits, geopolitical tensions, notably the Iran-Israel conflict, have spurred market volatility. Global economic prospects appear bleak, with trade barriers rising, as reported by the OECD and World Bank. Amidst fluctuating commodity prices, and surging crude oil and gold, central banks globally are leveraging lower inflation rates to cut policy rates. The RBI's projections for 2024-25 expect a 6.5% growth rate, with significant gains in the fourth quarter. India leads in economic activity expansion according to Purchasing Managers' Index surveys. Evidence of a surge in rural demand has been substantiated by strong agricultural output. Consumer confidence remains stable, underpinning the economy's resilience against global trade and geopolitical tensions. (With inputs from agencies.)