Even as economic uncertainty gathers strength worldwide, the Indian economy has demonstrated unprecedented resilience, which is brought to light in the Reserve Bank of India's (RBI) most recent monthly bulletin.
The health of the agricultural sector and positive consumption trends are the best barometers of this resilience.
The international economy is grappling with heightened pressures owing to rising trade tensions and mounting uncertainty about the depth, timing, and intensity of tariffs. They have imparted a huge volatility in global financial markets and instigated worries regarding the potential dampening of world growth, RBI bulletin stated.
Yet, the economic prowess of India continues to be visible as the nation keeps coping with these international challenges with ease. The major reason for this resilience lies in the drop in Consumer Price Index (CPI) inflation, which fell to a seven-month low of 3.6 percent during February 2025. This was mainly caused by a food price correction, further strengthening the macroeconomic stability of India.
The RBI bulletin highlights that Indian economic fundamentals are strong, and growth is poised to continue the momentum. It is fueled by robust domestic demand, steady investment activity, and continued government outlays on the development of infrastructure.
Private consumption spending is increasing, demonstrating robust consumer confidence and consistent demand within the economy. Government expenditure has also picked up in recent months, which is adding further momentum to economic growth. Core sectors like construction, financial services, and trade are consistently doing well and act as a pillar of India's economic robustness.
The bulletin states that high-frequency economic indicators imply that the momentum of growth will continue in the fourth quarter. The advance estimates of GDP for 2023-24 are revised to show that the real GDP growth rate is 9.2 percent, the strongest in more than a decade barring the post-Covid bounce-back. This adds emphasis that even with world uncertainties, India's growth story continues to be a secure and positive driver.
Recent trends in different sectors support this perception of continuous growth. During the 2024-25 Kharif season, foodgrain and oilseed production estimates were raised. Rabi foodgrains also grew by 2.8 percent, fueled by excess rainfall and favorable reservoir levels.
Although the Indian manufacturing sector saw a slight loss of momentum, there was a rise in purchasing activity and employment in February 2025. The services sector, however, posted strong expansion in new businesses and employment.
While the strength from good macroeconomic fundamentals and cautious policies, the RBI observes that the external economic situation remains challenging. Foreign portfolio outflows in February were persistent, putting significant pressure on domestic equity markets and fueling currency depreciation. These external pressures have not, however, substantially weakened India's growth prospects, with the nation being resilient in the face of global volatility.
Read also| Sensex Surges 1,131 Points, Nifty Ends Above 22,800 as Markets Soar
