Economy resilient, but sensitive to global headwinds: RBI bulletin
1 min read . Updated: 18 Nov 2022, 05:44 PM IST
PremiumThe outlook for the global economy remains clouded with downside risks, the bulletin said
With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook appears to be resilient though it is still sensitive to global headwinds, RBI bulletin said on Friday.
"With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook can best be characterised as resilient but sensitive to formidable global headwinds," said RBI Bulletin.
While urban demand appears robust, rural demand is muted but more recently picking up traction, the bulletin said. RBI publishes the Bulletin a monthly basis which is basically a collection of articles that analyse the trends in domestic and global economies.
The article has been prepared by a team led by RBI Deputy Governor Michael Debabrata Patra.
The outlook for the global economy remains clouded with downside risks, the bulletin said. Global financial conditions have been tightening and deteriorating market liquidity is amplifying financial price movements, it said.
Markets are now pricing in moderate increases in policy rates and risk-on appetite has returned. In India, supply responses in the economy are gaining strength, it noted.
The monetary policy committee (MPC) has hiked the key lending rate, repo, by 190 basis points so far in the current rate hike cycle to combat inflation.
The inflation stayed above for three consecutive quarters forcing the rate panel to write a formal explanation to the Government.
However, there are signs of inflation easing in a few economies, especially amongst emerging market economies, the Bulletin said.
The RBI, however, said the opinions expressed in the article are those of the authors and do not represent the views of the central bank.
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