The Indian economy is showing resilience and stability, and the gross domestic product is expected to grow at 6.6 per cent in 2024-25, supported by a revival in rural consumption, a pickup in government consumption and investment, and strong services exports, a RBI report said on Monday.
The Reserve Bank has released the December 2024 issue of the Financial Stability Report, which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council on the resilience of the Indian financial system and risks to financial stability.
"The soundness of scheduled commercial banks (SCBs) has been supported by strong profitability, declining non-performing assets and adequate capital and liquidity buffers. Return on assets (RoA) and return on equity (RoE) are at decadal highs, while the gross non-performing asset (GNPA) ratio has fallen to a multi-year low," the report said.
This, macro stress tests reveal that almost all SCBs are holding an adequate capital buffer to support a regulatory minimum threshold under even adverse stress scenarios. Further, stress tests are able to test the resilience of mutual funds and clearing corporations as well.
On the economy, FSR said that during the first half of 2024-25, real GDP growth (y-o-y) softened to 6 per cent from 8.2 per cent and 8.1 per cent growth registered in H1 and H2 of 2023-24, respectively.
"structural growth drivers remain in place.
According to the central bank, growth is likely to rebound in Q3 and Q4 of 2024-25 led by pickup in domestic drivers, primarily public consumption and investment, along with strong service exports and easy financial conditions, RBI said.
Talking about inflation, the report said going forward, the disinflationary effect of a bumper kharif harvest and rabi crop prospects are likely to ease the prices of foodgrains.
On the flipside, the rising frequency of extreme weather events continues to pose risks for food inflation dynamics.
Persisting geopolitical conflicts and geo-economic fragmentation can also impose upside pressures on global supply chain and commodity prices.
Read also| Branded Hotels in India Expected to See Double-Digit Growth in FY25 and FY26: Crisil
