Indian Economy Sustains Growth Momentum Despite Global Uncertainty: RBI Bulletin

New Delhi, Jul 23 (KNN) The Indian economy has remained resilient despite global uncertainties, supply chain disruptions and fragmented trade conditions, supported by healthy domestic demand and steady performance of the industrial and services sectors, according to the Reserve Bank of India's (RBI) July Bulletin.

RBI Sees Economy Maintaining Growth Momentum
The bulletin said India continues to be among the fastest-growing major economies and has sustained economic momentum through June despite an uncertain global environment.

 Industrial and services sector indicators remained robust, while rural demand recorded a sharp pickup during June, supporting domestic consumption. 

Goods and Services Tax (GST) collections also strengthened during the month, reflecting healthy economic activity and aggregate demand.

The farm sector, however, is experiencing an uneven southwest monsoon. The RBI said the impact on food inflation could be moderated by comfortable foodgrain stocks.

Trade Performance Remains Strong
The central bank highlighted that external trade maintained momentum in the first quarter of FY27, with strong growth in both exports and imports. 

It added that the operationalisation of the India-UK Comprehensive Economic and Trade Agreement, along with progress on other bilateral trade agreements, is expected to further support trade.

According to the bulletin, India's external sector remains stable, with improving foreign investment inflows indicating renewed investor confidence and strengthening the country's external outlook.

Headline Inflation Climbs to 18-Month High
On inflation, the RBI said headline Consumer Price Index (CPI) inflation rose to 4.4 percent in June 2026 from 3.9 percent in May, marking its highest level in 18 months. The increase was primarily driven by higher prices of food, beverages and fuel.

Food inflation rose across categories, including meat, edible oils, fruits and spices, while fuel inflation increased following higher retail prices of petrol, diesel and liquefied petroleum gas (LPG).

Core Inflation Stable, Liquidity Improves
Despite the rise in headline inflation, core inflation remained stable at 3.9 percent year-on-year, supported by lower prices in personal care and miscellaneous services, partly offset by higher restaurant and accommodation costs.

The bulletin also noted that inflation increased in both urban and rural areas, with most states and Union Territories recording inflation within the 2-6 percent range. Liquidity conditions continued to improve during the period, supporting ongoing credit growth.

(KNN Bureau)