The Reserve Bank of India’s Central Board of Directors on Friday assessed the emerging global and domestic economic landscape, including the evolving geopolitical and financial market developments and associated challenges.
Further, the Board, which met in Thiruvananthapuram under the Chairmanship of Governor Sanjay Malhotra, discussed the Reserve Bank’s activities during the current accounting year 2024-25. The Board also approved the bank’s budget for the accounting year 2025-26.
The assessment of the emerging global and domestic economic landscape comes in the backdrop of the resilience of the global economy being tested by escalating trade tensions and a heightened wave of uncertainty around the scope, timing, and intensity of tariffs.
The RBI’s latest monthly bulletin noted that the immediate course of the global economy is likely to be shaped by escalating trade tensions, inflationary pressures stemming from tariffs, and attendant financial market volatility
In an article “State of the Economy” in the bulletin, RBI staffers cautioned that the pass-through of higher tariffs to consumer prices remains a key risk to inflation, which is already exhibiting signs of stubbornness in many Advanced Economies (AEs).
“Central banks in AEs would have to factor in such pressures while calibrating policy responses in an environment of potential slowdown in growth. EMEs (Emerging Market Economies), on the other hand, are likely to record higher growth than their AE counterparts, although capital outflows and potential currency depreciation remain major risks,” they said.
