The Reserve Bank of India’s (RBI) monthly bulletin, released today, says that domestically, macroeconomic fundamentals remain strong, and economic growth is poised to sustain momentum. This is driven by robust domestic demand, steady investment activity, ongoing policy-driven infrastructure development, and a pick-up in government spending.

The latest high-frequency indicators suggest aggregate demand continued will remain resilient in Q4:2024-25, says the report, adding that activity indicators such as E-way bills and toll collections recorded double-digit (y-o-y) growth in February 2025.

The RBI says the headline inflation in India has significantly declined from over 6% in October 2024 to 3.6% in February 2025. "India’s macroeconomic strength to face global challenges is bolstered by a decline in headline CPI inflation on account of a further correction in food prices."

Despite low inflation, volatility in commodity prices and weather anomalies remain potential risks. "Robust kharif production, better rabi sowing coupled with higher reservoir levels and seasonal winter correction in vegetable prices augur well for food inflation, although volatility in commodity prices and weather anomalies remain potential upside risks to the overall inflation outlook," says the RBI.

It adds that India’s external sector continues to find support from resilient services exports, which remain less affected by global disruptions while facing challenges from weakening global trade and tariff uncertainty. Going forward, the RBI expects India’s structural strengths — sound fiscal policies, a well-calibrated monetary framework, and digital transformation initiatives — could provide a strong foundation for long-term sustainable economic growth.

Globally, the central bank says the resilience of the global economy is being tested by escalating trade tensions and a heightened wave of uncertainty around the scope, timing, and intensity of tariffs. "While engendering heightened volatility in global financial markets, these have also caused apprehensions about the slowdown in global growth."

Foreign portfolio outflows

Growth momentum to continue on strong macro fundamentals, robust demand: RBI