Economy resilient, yet vulnerable to global headwinds, says RBI in latest press release

The Reserve Bank of India (RBI) on Friday released the November 2022 issue of its monthly report on the state of the economy, saying inflation has started to show signs of easing.

With headline inflation beginning to show signs of abating, the domestic macroeconomic outlook appears fragile although it remains vulnerable to global headwinds, the report said on Friday.

The article published in the latest RBI bulletin also said that the outlook for the global economy remains clouded by risks. Global financial conditions have been tightening and worsening market liquidity is increasing price changes in financial markets.

Markets are now pricing in modest rate hikes and risk appetite has returned. In India, the supply response in the economy is strengthening, it said.

“With inflation beginning to show signs of abating, the domestic macroeconomic outlook can best be described as resilient but vulnerable to formidable global headwinds,” the article said.

Urban demand appears strong, while rural demand is muted but recently picking up, she added.

The article has been prepared by a team led by RBI Deputy Governor Michael Debabrata Patra.

The RBI, however, said that the views expressed in the article are those of the authors and do not reflect the views of the central bank.

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