RBI Flags Global Risks To India Growth

Mumbai: The balance sheet of the RBI increased to Rs 76.25 lakh crore, aided by nearly 33 per cent gains in foreign exchange transactions, as of March 2025, leading to a bumper Rs 2.7 lakh crore dividend to the central government, said the central bank’s annual report released on Thursday.

The keenly awaited RBI report, which was released on Thursday, said the Indian economy is poised to remain the fastest-growing major economy in 2025-26 by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth. The economy exhibited resilience during 2024-25, supported by strong macroeconomic fundamentals and proactive policy measures, amid protracted geopolitical tensions and geoeconomic fragmentation, said the RBI’s Annual Report for the Year 2024-25.

It also flagged global financial market volatility, geopolitical tensions, trade fragmentation, supply-chain disruptions and climate-induced uncertainties as factors posing downside risks to the growth outlook and also upside risks to the inflation outlook. However, factors like easing of supply-chain pressures, softening global commodity prices and higher agricultural production on above-normal south west monsoon augur well for inflation outlook. Shifts in tariff policies may result in sporadic episodes of volatility in financial markets, it said, adding that exports may encounter headwinds on “inward-looking policies and tariff wars”. The trade pacts being signed and negotiated by India will help ensure that the impact is limited, the RBI said, adding that services exports and inward remittances will help ensure that the current account deficit is “eminently manageable” in the new fiscal. The RBI said it will continue to undertake liquidity management operations in sync with the monetary policy stance to keep system liquidity adequate to meet the productive requirements of the economy.

A benign inflation outlook and moderate growth warrant a monetary policy to be growth-supportive, while remaining watchful about the rapidly evolving global macroeconomic conditions, said the Central Bank in its 2024-25 annual report.