The Reserve Bank’s monthly bulletin for March 2025 has said that the Indian economy continues to demonstrate resilience despite global challenges. According to the ‘State of the Economy’ article, the global economy is being tested by escalating trade tensions and a heightened wave of uncertainty around the scope, timing, and intensity of tariffs. Besides, heightened volatility in global financial markets has added to apprehensions about the slowdown in global growth.
According to the article, the Indian economy has improved despite these challenges as evident in the robust performance of the agriculture sector and improving consumption. As per the article, India’s macroeconomic strength to face these challenges is bolstered by a decline in headline CPI inflation to a seven-month low of 3.6 per cent in February 2025 on account of a further correction in food prices. The article adds that sound fiscal policies, a well-calibrated monetary framework, and digital transformation initiatives are expected to provide a strong foundation for long-term sustainable economic growth.
The article, however, added that the reverberations of a tumultuous external environment are being reflected in sustained foreign portfolio outflows. It noted that the Reserve Bank has remained agile, swiftly tackling liquidity shortages triggered by government tax flow dynamics, currency leakages and foreign portfolio investor outflows. It said that proactive measures by RBI like a strategic mix of interventions, including open market operations, daily variable rate repo auctions, and dollar/rupee buy-sell swap auctions have helped stabilize market liquidity conditions, ensuring financial resilience in an unpredictable global environment.
RBI has said that the views expressed in the Bulletin articles are of the authors and do not represent the views of the apex bank.