India is ‘on course to becoming the fastest growing economy in the world’: RBI

The Reserve Bank of India (RBI) on Saturday (July 16) said that the country’s economy remained resilient in the face of global headwinds. India’s top bank also predicted that India is anticipated to continue on the path to becoming the world’s fastest-growing economy as inflation declines from its recent peak. Reuters reports that RBI in a bulletin said that recent improvements in the southwest monsoon and fresh planting have increased confidence that rural demand will soon catch up to urban spending and consolidate a recovery. “Knock-on effects of geopolitical spill overs are visible in several sectors, tapering the pace of recovery.”

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“In spite of this overwhelming shock, there are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession.”

RBI did not give a time frame, however, according to it, the worst of the recent inflation spike will be over if the commodity price slowdown seen in recent weeks persists together with the reduction of supply chain pressures.

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“There is some evidence now that supply-chain pressures are peaking globally and in India,” the bank said, adding that “a major source of upward inflation pressures may be ebbing.”

“External debt remains modest as a proportion to GDP and has actually declined between March 2021 and March 2022,” RBI said.

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Reuters reports that according to figures released this week, India’s annual consumer inflation remained agonisingly high above the 7 per cent mark, more than the central bank’s tolerance range for the sixth consecutive month.

(With inputs from agencies)

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