Indian economy survives despite global uncertainty, said the central bank bulletin
India’s economy continues to survive against global fluxes, dealing with the impact of geopolitical tension and trade uncertainty, the Reserve Bank of India said in its monthly bulletin released on Wednesday.
RBI cuts its main policy level with 50 basis points greater than last month and cut the ratio of cash reserves to banks because low inflation provides space to focus on supporting growth in the midst of stable global conditions.
Indian economic activity remains tough, assisted by increasing prospects for plants planted summer, strong momentum in the service sector, and simple growth in industrial activity, said RBI in the article ‘Economic State’.
“High frequency indicators indicate stability in aggregate demand,” said the central bank.
Indian retail inflation rates subsided to 2.10% in June, the lowest six years.
“Reducing geo-political tension in the Middle East and optimism in trade agreements” along with some loosening norms of regulations for infrastructure financing that support financial market sentiment in the second half of June, RBI said in a bulletin.
However, in the first half of July, domestic investor sentiment remained careful amid the ongoing uncertainty on the potential of the Indian-US trade agreement and various company revenues in the quarter ended in June, the central bank said.
Source: Reuters
