New Delhi, Aug 25 (SocialNews.XYZ) India’s economy, driven by buoyant domestic demand and rising manufacturing and services activity, has demonstrated notable resilience to the ongoing global headwinds, according to the RBI’s monthly bulletin released on Tuesday.
The global economic outlook continues to be shaped by geopolitical frictions in West Asia and fresh tariffs by the US. Despite these risks to global trade and the growth-inflation matrix, India’s robust macroeconomic fundamentals continue to provide a cushion to the domestic economy, the bulletin stated.
The momentum of Q1:2026-27 continued in July with domestic demand remaining buoyant, as reflected by several indicators, including vehicle and tractor sales. Petroleum product consumption growth returned to positive territory, after three straight months of contraction. Industrial production strengthened sharply in June, recording its strongest growth in nearly two years, supported by a broad-based acceleration in manufacturing. The services sector also exhibited resilience, the RBI bulletin observed.
The recovery in southwest monsoon in July helped kharif sowing reach closer to normal acreage, partly mitigating some of the risks to the agriculture sector. Backed by a high stock of public foodgrains, the government has also announced an Open Market Sales Scheme for the current financial year to augment supply.
While headline CPI inflation edged up above the target, it was primarily on account of supply-side pressures, the bulletin said, noting that stable core inflation reaffirmed the lower pass-through of cost pressures.
Financial conditions are characterised by high credit growth, comfortable liquidity, and softening G-sec yields supported by a rebound in capital inflows. Liquidity conditions eased, supporting credit growth and ongoing investment activity, it said.
The bulletin also highlights that foreign capital inflows rebounded during the month, reinforcing the external sector. Both merchandise exports and imports grew strongly in July 2026, with exports growing at a four-month high in 2026-27 so far. The merchandise trade deficit widened in July, both sequentially and on a year-on-year (y-o-y) basis, reflecting a widening of the deficit in electronic goods.
The Centre’s fiscal deficit increased marginally during Q1:2026-27 as compared to the previous year, accompanied by higher capital expenditure. The gross fiscal deficit of the states has been lower during the same period. System liquidity improved in July and August. The liquidity surplus narrowed in the second half of July on account of tax outflows, but it went up in August on account of drawdown of the government cash balances and measures taken to attract capital, the bulletin stated.
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz