The RBI report mentioned that domestic financial markets were under pressure in April, but saw a reversal at the beginning of the third week of May.
In its monthly bulletin released late on Wednesday, Reserve Bank of India (RBI) observed that amidst the global uncertainties the Indian economy has remained resilient and continues to show signs of steady progress.
The global economy is affected by continuing trade frictions, shifting policy landscapes, and low consumer confidence. In such vulnerable global economic climate, India’s approach is of “cautious optimism,” it added.
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“Amidst these challenges, the Indian economy exhibited resilience. Various high frequency indicators of industrial and services sectors sustained their momentum in April,” May Bulletin said.
April Indicators
The RBI report mentioned that domestic financial markets were under pressure in April, but saw a reversal at the beginning of the third week of May.
With regarding the automobile sector, trends showed a mixed bag. While high base effect that affected two-wheeler sales caused wholesale automobile sales fell 13.3 per cent, tractor sales depicted strong growth even though its slow paced.
The agricultural sector is expected to give positive outcomes considering the favourable forecasts for the 2025 southwest monsoon, the report said.
“Inflation pressure has eased significantly and is poised for a durable alignment with the target in 2025-26. The prospects of bumper rabi harvest and the outlook of an above normal monsoon would further strengthen rural consumption and is also likely to keep food inflation in check. Consumers and businesses remain confident, supportive for a strengthening of economic activity,” the Bulletin stated.
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Besides, in April, the Central Bank reduced its key policy rate for a second consecutive time, and indicated more cuts by shifting its monetary policy outlook from ‘accommodative’ from ‘neutral’.
In this favorable scenario, the recent completion of a free trade agreement with the UK paves the way to a strengthening of bilateral trade relationships, the report said.
