RBI Governor Optimistic About India's Resilient Economy Amid Global Uncertainties

RBI Governor Sanjay Malhotra predicts higher global growth by 2026, despite geopolitical tensions. India's economy shows resilience with improved growth outlook and controlled inflation. Recent trade deals and supportive domestic policies enhance prospects. Inflation remains low, with expectations of stable economic fundamentals maintaining India's robust position.

In a recent disclosure, Reserve Bank of India Governor Sanjay Malhotra expressed confidence in global economic growth prospects for 2026, despite facing escalating geopolitical tensions and trade disruptions. During the RBI's Monetary Policy Committee meeting from February 4-6, Malhotra emphasized India's resilient economy, improved growth potential, and stable inflation.

Malhotra remarked that global expansion would be fueled by increased technology investments, favorable fiscal measures, and accommodating financial conditions. However, he highlighted the uneven inflation landscape prompting divergent policy actions by central banks nearing the end of their easing cycles, amid volatile financial markets and uncertain investor sentiments.

While domestic activity remains robust from internal dynamics, Malhotra projected a 90 basis-point increase in real GDP growth to 6.5% for 2024-25, with continued strength expected the following year. Growth efforts, underpinning policies announced in the Union Budget, and recent critical trade agreements with the EU and US are seen bolstering the external sector. Inflation, primarily low, is projected at 2.1% for 2025-26 with precious metal impacts noted. Malhotra assured that India's economic fundamentals are robust and current policy rates are suitable given the upbeat growth and controlled inflation scenario.

(With inputs from agencies.)