India’s demand conditions resilient: RBI

On the supply side, a buoyant farm sector and continued revival in manufacturing and services is aiding the recovery

March 17, 2022

Although India's macroeconomic fundamentals are strong, the ongoing global developments may pose downside risks in terms of spillovers

The RBI is also expected to review inflation and growth forecasts for FY23, keeping the Russia-Ukraine conflict in context

The inflation rate is anticipated to touch 4.5% in 2022-23

A lack of a concrete solution to the ongoing conflict may have adverse implications for the global economic recovery

Despite uncertainties due to the Russia-Ukraine conflict and the global economic setback due to the pandemic, India’s demand conditions have remained resilient driven by rising consumer and business confidence according to the Reserve Bank of India. On the supply side, a buoyant farm sector and continued revival in manufacturing and services is aiding the recovery.

Although India’s macroeconomic fundamentals are strong, the ongoing global developments may pose downside risks in terms of spillovers. The RBI is also expected to review inflation and growth forecasts for FY23, keeping the Russia-Ukraine conflict in context. The inflation rate is anticipated to touch 4.5% for 2022-23, while economic analysts peg it at 5.5%.

However, the apex bank also stated that the lack of a concrete solution to the ongoing conflict may have adverse implications for the global economic recovery, causing downward revisions of global growth for 2022.