2025.08.2903:12:03UTC+00Indian Economy Steady, But US Trade Tensions Pose Risks: RBI

The Indian economy continues to demonstrate resilience, bolstered by robust rural demand, as highlighted in the Reserve Bank of India's (RBI) monthly bulletin published on Thursday. Nevertheless, the RBI has expressed concerns that escalating trade tensions with the United States may pose a threat to economic growth. On a positive note, average inflation remains under the RBI's target of 4% for the current fiscal year. The RBI emphasized, "Future monetary policy will remain vigilant, closely monitoring incoming data along with the evolving domestic growth-inflation dynamics to determine the optimal monetary policy course." In August, the central bank decided to maintain its key interest rate at 5.50%. Additionally, a Reuters survey anticipates India's GDP growth rate will decelerate to 6.7% year-on-year for the April to June period, down from 7.4% in the previous quarter. The RBI forecasts that growth for the entire year will hover around 6.5%, with Governor Sanjay Malhotra asserting that the impact of increased tariffs is likely to be negligible. Official GDP figures are expected to be released later today.