RBI Bulletin Highlights India’s Economic Resilience Amid Fragile Global Growth Outlook

The Reserve Bank of India's (RBI) monthly bulletin, released in May, underscores a fragile global growth outlook, weighed down by ongoing trade tensions, policy uncertainty, and subdued consumer sentiment. Despite a brief reprieve from the United States' decision to pause new tariffs, the global economic environment continues to face significant headwinds.

According to the bulletin, global growth remains under pressure even as the United States announced a 90-day suspension of reciprocal tariffs for all countries except China. This announcement, made by US President Donald Trump on April 9, provided temporary relief to financial markets that had reacted negatively to the earlier imposition of a 26% tariff on Indian goods on April 2.

Despite these global uncertainties, the Reserve Bank of India (RBI) bulletin highlighted the resilience of the Indian economy, supported by strong domestic fundamentals. The report noted that “various high-frequency indicators of industrial and services sectors sustained their momentum in April,” signaling continued strength in economic activity.

The announcement of the tariff pause, along with a positive domestic growth outlook, sparked a strong recovery in India’s financial markets by mid-April. The domestic equity markets, which had initially dipped following the tariff announcements, rebounded sharply. This was further bolstered by robust Q4:2024-25 earnings from several banking and financial sector firms.

In summary, while global growth remains fragile due to persistent external risks, India’s economy has shown signs of resilience and stability, aided by sustained sectoral momentum and favorable investor sentiment.

Also Read: BrahMos & Akash Missiles Lead India’s Indigenous Defence Success