ECONOMY RESILIENT, FUNDAMENTALS STRONG, SAYS RBI GUV

Reserve Bank Governor Shaktikanta Das on Thursday called upon all stakeholders in the Indian financial ecosystem to assign highest priority to modernisation as it prepares to go more global and to strong governance amidst vigilance over emerging risks, including those from cyber hazards, climate change and global spillovers.

- NIVEDITA MUKHERJEE

In his foreword to the Central Bank’s half-yearly Financial Stability Report, Das said the Indian economy is exhibiting strength and resilience, with strong macroeconomic fundamentals and buffers amid global headwinds.

Since the December 2023 issue of the FSR, Das observes, the global financial system has shown remarkable resilience, weathering the halting progress in the last mile of prolonged geopolitical tensions and potential shocks to logistics and supply chains which remain a clear and present threat with spillovers to commodity prices, the ongoing disinflation and eventually to the global economic outlook.

Expressing satisfaction over the International Monetary Fund (IMF) projecting global growth to remain steady at 3.2 per cent in 2024 as in 2023, Das reminds that while near-term prospects are improving, pitstops in the last mile of disinflation, high public debt, stretched asset valuations, economic fragmentation, geopolitical tensions, climate disasters and cyber threats present downside risks, with emerging market economies (EMEs) remaining vulnerable to external shocks and spillovers.