Near-term outlook favourable to sustain high growth: RBI report

India’s near-term economic momentum remains favourable to sustain high growth, amid a benign inflation outlook, according to the Reserve Bank of India’s (RBI's) monthly State of the Economy report, released on Friday.

- MANOJIT SAHA

The recent trade deals with the European Union (EU) and the United States (US) are likely to play a significant role in the coming years by improving market access, which also attracted foreign portfolio investments to return — an indication of early signs of recovery, the report noted.

In the Union Budget presented earlier this month, the report said the government reaffirmed its commitment to fiscal consolidation without diluting the focus on long-term growth, with stepped-up allocation towards capital expenditure.

“The near-term economic outlook for the economy remains favourable and is well-positioned to sustain its high growth momentum, driven by consumption, investment, and productivity-enhancing reforms.” The report noted that headline inflation continues to remain benign as per the first print under the revised CPI series. “Inflation is expected to remain benign and near the inflation target, providing a positive growth-inflation balance in the near term.”