Indian The Reserve Bank (RBI) said on Thursday that the country will also remain the world’s fastest growing major economy in FY 2025-26. The RBI said in its annual report that the monetary policy should be helpful for future growth due to a decline in inflation and “slow pace” in the expansion of GDP (GDP). The central bank said in the latest report, “The Indian economy will be the fastest growing major economy in 2025-26 by taking advantage of its strong macroeconomic infrastructure, strong financial sector and commitment to sustainable development.
These are challenges
This marked the global financial market volatility, geopolitical stress, business fragmentation, disruption in supply chain and uncertainties caused by climate challenges as a positive risk for negative risk and positive aspect for the approach to development. The report states that the changes in tariff policies can result in the effect of instability in the financial markets. Also, exports may face adverse conditions due to “introverted policies and tariff war”. The RBI said that signing and negotiating India’s trade agreements will help limit these effects.
Inflation will remain less
Also, service exports and inward remittance will help to ensure that the current account deficit in the new FY (2025-26) is “notable”. The central bank has cut major policy rates in two consecutive reviews. The annual report said that now in a period of 12 months, there is “more confidence” about the target of four percent of inflation. It suggested that banks need to deal with both trade and banking risks keeping in mind the dynamic nature of interest rate risk, especially in view of the decrease in pure interest ‘margin’ (profit).
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