India’s central bank expects growth in the near future

Indian economy started rebounding. Its government believes that the worst is behind it and that the country won’t face any serious struggles in the coming months. Like other economies, India suffered during the coronavirus pandemic. A global crisis caused by the pandemic sent most countries into a recession. However, the outlook is brightening gradually as they strive to overcome the crisis.   

Still, recent weeks showed some market volatility, with the collapse of two U.S. regional banks adding to the strain. Economists feared that this failure would weigh on the global banking sector heavily. On Tuesday, the Reserve Bank of India issued a bulletin, assuring markets it wouldn’t face any significant repercussions from this latest hit to the baking system.

The RBI also stated that India would maintain its current pace of expansion and wouldn’t slow down as the global economy is currently doing. Moreover, the central bank forecasted that the gross domestic product would grow at 5.3% in Q4 of 2022/23 year. The officials believe that this forecast is achievable.

India’s economy grew by 4.4% in Q3. India might show 7% growth for the fiscal year ending March 2023. It reported 9.1% growth in the previous 2021/22 year.

Will the U.S. banks’ collapse influence India?   

RBI discussed such a possibility today. However, Indian officials believe the recent U.S. bank failures won’t impact India’s economic activity. On the other hand, investors are preparing to endure harder financial conditions in the coming weeks. Some analysts noted that some countries might need to oversee their monetary policy to maintain financial stability.

Many major economies hiked interest rates to fight rising inflation, but high rates might send the country into recession again if maintained for a long period. India’s central bank also noted that the future looks bleaker compared to early February. However, the bank was referring global economy.