New Delhi, 26 June (IANS). According to the recently released Reserve Bank of India (RBI) monthly bulletin, different high-frequency indicators indicate strong economic activity in industrial and service sectors in India amid global uncertainty for May 2025.
The report said that agriculture recorded an increase in the production of most major crops on a widespread basis during 2024-25. The condition of domestic prices remains gentle and the headline inflation remained below the target for the fourth consecutive month in May.
The report also reported that financial conditions remain favorable for the facility of transmission of rate cuts in the loan market.
The report stated that the global economy is in unstable state, which is struggling with double shaking of trade policy uncertainty and increase in geopolitical stresses.
However, on the domestic front, the provisional estimates released in May have confirmed India’s growth rate of 6.5 percent in 2024–25, with significant gradual growth in the fourth quarter.
Different high-priciency indicators for May indicate strong economic activity in industrial and service sectors.
The overall expansion in activity in India was the highest in the countries surveyed for the Purchasing Manager Index (PMI), with an exception among the contractions seen in the new export order seen in May.
For May, the high-facility indicators of total demand also suggested an increase in rural demand. Consumer sentiments show better optimism about stable consumer confidence and future for the current period.
The RBI bulletin states that despite global economic, trade and geopolitical uncertainties, they all show the strength of the Indian economy.
According to the report, domestic inflation remains gentle and the headline inflation remained below the target for the fourth consecutive month in May.
In the agricultural session of 2024-25, record domestic crop production is indicating a rapid and continuous decrease in food price inflation.
According to the report, stable core inflation with some signs of some softening except the effects of unstable and high gold and silver prices indicates that the underlying inflation pressure remains cool.
The report also reported that there was a slight increase in equity markets during the May-June despite the fluctuations due to the Economic Outlook, tariff news and global signals on the developed domestic landscape.
With the increase in geopolitical tension in the Middle East, the equity market recorded a sharp decline for some time, but on June 20 it saw a great jump.
The RBI bulletin further stated that although there was a decrease in debt growth in April, especially in agriculture and service sectors, but non-bank loan sources, including external commercial borrowings (ECBs) continued to continue to increase well, although it was softened from March. Overall, the financial conditions remained favorable for effectively transporting rate cuts in the debt market.
The report also stated that the external sector remained strong with sufficient foreign exchange reserves for imports and external loans.
-IANS
SKT/