Macroeconomic Stability, Reforms Vital For India’s Growth: RBI Article

ENA Economy 2025-12-23 13:30:22 New Delhi, Dec 23 (KNN) A sustained focus on strengthening macroeconomic fundamentals and pursuing economic reforms will help India maintain high growth momentum amid rapidly changing global conditions, the Reserve Bank of India (RBI) said in its latest State of the Economy article. The RBI noted that continued focus on sound macroeconomic management and reforms will lead to efficiency and productivity, keeping the economy firmly on a high-growth path despite global uncertainties. Global Trade Uncertainty Persists According to the article, 2025 has seen a shift toward bilateral tariff renegotiations, with uncertain ripple effects on global trade, supply chains and growth. While India is not entirely insulated from external headwinds, the RBI said coordinated fiscal, monetary and regulatory policies over the years have helped build resilience in the domestic economy. Growth Driven by Domestic Demand Indias gross domestic product (GDP) grew 8.2 percent in Q2 FY26, the fastest in six quarters, driven mainly by strong domestic demand and private consumption, the RBI said. High-frequency data showed that economic activity stayed resilient even in the post-festival November. While GST collections were weaker due to rate cuts, other indicators such as e-way bills, petroleum consumption and digital payments showed improved growth. Urban Demand and Industrial Activity Improve Urban demand strengthened further after the festive season, with retail passenger vehicle sales posting their fastest growth in over a year, aided by GST benefits, wedding demand and better supply. RBI said industrial activity remained strong in November, while the trade deficit narrowed as exports rose and imports fell, led by lower post-festive gold imports. Mexico Tariff Hike a Concern for Exports The article warned that Mexicos higher import duties of 5-50 percent on goods from non-free trade agreement countries could hurt Indian exports, as tariffs on engineering goods, autos and components may jump from 20 percent to 50 percent from January 1, 2026. (KNN Bureau) 44519 https://knnindia.co.in/news/newsdetails/economy/macroeconomic-stability-reforms-vital-for-indias-growth-rbi-article 2025-12-23 13:30:22 knnindia.co.in Macroeconomic Stability, Reforms Vital For India’s Growth: RBI Article