NEW DELHI: The Reserve Bank of India (RBI) has said India is better placed than many other countries in avoiding the risks of potential stagflation. “With most constituents of GDP surpassing pre-pandemic levels, domestic economic activity is gaining strength"
"The recovery remained broadly on track. This demonstrates the resilience of the economy in the face of multiple shocks and the innate strength of macro fundamentals as India strives to regain a sustainable high growth trajectory,” the Central Bank said in its monthly State of the Economy report.
It lists out in the report that recovery is gaining strength. It cites that the gross domestic product (GDP) for 2021-22 surpassed its pre-pandemic (2019-20) level by 1.5% and economic activities, gauged by high-frequency indicators, are gaining strength in 2022-23.
The RBI says the unemployment rate dropped in May 2022 for both urban and rural constituents, and revenue collection under the goods and services tax (GST) stood at Rs 1.4 lakh crore, reflective of the gathering pace of business activity.
The RBI also takes heart from the fact that inflation in May has recorded a fall after seven months of continuous rise. It warns that the global economic conditions continued to deteriorate as high commodity prices and financial market volatility have led to heightened uncertainty. It says while the advanced economies are facing the risk of stagflation, emerging market economies like India are grappling with the global trade slowdown, capital outflows and imported inflation.