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Informist, Wednesday, Jan. 21, 2026

 

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--RBI Report: Dec data shows buoyancy in growth impulses as demand upbeat 
--CONTEXT: Comments in RBI's state of econ paper in bulletin for Jan 
--RBI Report: Geo-economic risks still-elevated, policy uncertainty ahead 
--RBI Report: India econ gives ground for optimism ahead despite global risks 
--RBI Report: 2025 econ reforms expected to strengthen growth prospects 
--RBI Report: Focussed on balancing innovation, stability, consumer protection 
--RBI Report: Prudent regulation to support long-term economic growth
 

 

NEW DELHI – Amidst escalation of geopolitical tensions, geo-economic risks, and policy uncertainty, the Indian economy remains resilient and provides ground for optimism going forward, the Reserve Bank of India's staff said. High-frequency indicators for December suggest the economy saw continued buoyancy in growth impulses and demand conditions remained upbeat, the RBI's staff said in the monthly State of the Economy article released Wednesday.

 

"The year 2026 began with an escalation of geopolitical tensions, marked by developments such as the US intervention in Venezuela, the simmering conflict in the Middle East, ambiguity surrounding the Russia–Ukraine peace deal, and escalation of the row over Greenland, all of which point to still-elevated geo-economic risks and policy uncertainty ahead," the central bank staff said. "Even amidst these global uncertainties, the current state of the economy provides ground for optimism going forward," the staff said in the article, which is part of the RBI's monthly bulletin. Comments in the article do not represent the views of the central bank.

 

India's GDP is estimated to have grown 7.4% in the current financial year, according to the government's first advance estimate. This reflects the "resilience of the Indian economy, driven by domestic factors amidst a challenging external environment", the RBI staff said.

 

India will remain the fastest growing major economy in the world in 2025-26 (Apr-Mar), the RBI staff said. The recent economic reforms undertaken by the government such as rationalisation of tax structures and implementation of labour codes are expected to strengthen the country's growth prospects, the staff added. 

 

Going forward, policy focus will be on striking a balance between innovation and stability, and consumer protection, the staff paper said. A prudent approach to regulation and supervision should also help improve productivity and support long-term economic growth, it added. Despite global risks, India's external sector remains stable thanks to comfortable foreign exchange reserves and a sustainable current account deficit, the RBI staff said.  End

 

Reported by Shubham Rana

Edited by Ashish Shirke

 

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