India’s Economy Shows Resilience Amid Global Slowdown: RBI Report

The global economy continues to struggle due to ongoing trade frictions, yet India’s economy demonstrates notable resilience, according to the Reserve Bank of India (RBI).

These challenges have dampened the global growth outlook, yet India’s economy demonstrates notable resilience.

India’s Economy Sustains Momentum In Industry And Services

Despite external pressures, key high-frequency indicators in India’s industrial and services sectors maintained their momentum in April.

The RBI Bulletin highlights that these sectors continue to drive growth amidst global uncertainties.

A bumper rabi harvest and increased acreage for summer crops, along with favourable southwest monsoon forecasts for 2025, signal strong prospects for India’s agriculture sector, boosting rural economic activity.

Inflation Eases To Lowest Levels Since 2019

Headline Consumer Price Index (CPI) inflation declined for the sixth consecutive month, reaching its lowest point since July 2019.

This reduction was largely due to sustained easing of food prices, providing relief to consumers across the country.

Year-on-year inflation rates for agricultural labourers (CPI-AL) and rural labourers (CPI-RL) further eased to 3.48% and 3.53% respectively in April 2025, down from over 7% a year earlier.

This moderation offers financial relief to poorer households dependent on agricultural and rural incomes.

Financial Markets Recover After Initial Slump

Domestic financial markets, initially unsettled by recent US tariff announcements, recovered strongly in the second half of April.

Robust Q4 corporate earnings reports, particularly from banking and financial sectors, helped boost investor confidence.

The RBI report notes that the growth rate of currency notes in circulation (NiC) during 2014-2024 was significantly lower compared to previous decades.

While NiC growth outpaced GDP between 1994 and 2004, this gap has substantially narrowed since then.

The RBI Bulletin highlights a positive correlation between night-time satellite light intensity and tax collections as well as GDP growth.

This relationship suggests that expanding formal economic activity reduces dependence on cash transactions.

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