India's economy stable in June-July amid tensions and apprehensions: RBI Bulletin
An article published in the latest issue of the Reserve Bank of India (RBI) Bulletin said that India's economic activity remained stable in June and July this year amid geopolitical tensions and tariff policy uncertainties, with better prospects for the Kharif agricultural season, continued strong momentum in the services sector and modest growth in industrial activity.
The global macroeconomic environment remained volatile in these two months.
The article on the state of the domestic economy said that core consumer price index (CPI) based inflation remained below 4 per cent for the fifth consecutive month in June due to a decline in food prices.
Systemic liquidity remained in surplus to enable faster transmission of policy rate cuts to the debt markets. It said that the external sector remained resilient due to adequate foreign exchange reserves and moderate external debt-to-GDP ratio.
Another article in the bulletin mentioned that a 10 per cent increase in global crude oil prices could, according to empirical estimates, raise India's core inflation by about 20 basis points on a contemporaneous basis.
The article on the relationship between oil prices and inflation in the country said that there is a need to take measures not only to control the impact on domestic prices due to increased dependence on oil imports but also to gradually move towards alternative sources of fuel for more efficient management of domestic fuel prices in the long term.
