India anchor of stability in volatile world: RBI Guv Sanjay Malhotra
New Delhi: India’s macro-economic fundamentals have continued to remain very strong, and the country has become an anchor of stability in a volatile world, Reserve Bank Governor Sanjay Malhotra said on Friday.
Speaking at Kautilya Economic Conclave 2025 here, the governor attributed the country’s strong fundamentals to low inflation, good foreign exchange reserves, a narrow current account deficit (CAD), and strong balance sheets of our banks and corporates.
“It is the combined efforts of the government’s policy makers, regulators, and regulated entities. All in all, despite recent odds, the economy seems well settled into an equilibrium of resilient growth. This is quite a feat...makes India stand out as an anchor of stability in a volatile world,” Malhotra said.
The Reserve Bank on Wednesday revised upward its growth estimates for the current fiscal year to 6.8 per cent and lowered its inflation projection to 2.6 per cent based on an above-normal monsoon and the rationalisation of GST rates.
In August, the Reserve Bank of India (RBI) projected a 6.5 per cent GDP growth rate for 2025-26, along with an inflation forecast of 3.1 per cent.
“India’s macroeconomic fundamentals have remained very strong, built assiduously over the decades. We have strong forex reserves, low inflation since February, a narrow current account deficit, a very credible fiscal consolidation path, very strong balance sheets of our banks and corporates,” the governor said.
This, Malhotra said, is to be attributed to the steadfast attention to ensuring microeconomic, price, financial, and even policy stability, despite changes in the government.
India’s forex reserves stood at $700.236 billion during the week ended September 26, according to the RBI data on Friday.
In the latest monetary policy statement, the RBI said the inflation outcome is likely to be softer than what was projected in August, primarily on account of the GST rate cuts and benign food prices.
It has projected the consumer price index (CPI) based inflation for 2025-26 at 2.6 per cent, with Q2 at 1.8 per cent, Q3 at 1.8 per cent, and Q4 at 4.0 per cent.
The inflation for Q1 2026-27 is projected at 4.5 per cent. The risks are evenly balanced.
Moreover, RBI Governor Sanjay Malhotra said perhaps gold price is acting as a new barometer reflecting global uncertainties as the crude oil used to be in the recent past.
While mentioning that fiscally almost every country today is “quite stressed”, Malhotra also said current trade policy environment could damage growth in some of the economies and cautioned that globally, stock markets might see a correction.
The Reserve Bank of India (RBI), while leaving the key interest rate unchanged at 5.5 per cent with a neutral monetary policy stance on Wednesday, said the global economy has been more resilient than anticipated but outlook remains clouded.
“Despite geopolitical tensions that would have sent oil prices soaring in an earlier decade, they (oil prices) have been very range bound. This could be due to a decline in oil intensity in GDP, not just in India, but across the world.
“Perhaps gold prices now are showing the kind of movement that oil used to that is acting as a barometer of global uncertainty,” the RBI Governor said at the Kautilya Economic Conclave 2025.
Sharing his views on various factors influencing the global economic prospects, he sounded a note of caution, saying that equity markets, too, seem to be a bit complacent.
Against the backdrop of technology stocks leading most of the global stock rallies, the Governor said a “correction might be in the offing”.
On Friday, spot gold edged higher to $3,867/ounce and is poised for a seventh consecutive weekly gain. The yellow metal prices retreated on Thursday, pulling back from a record high of $3,896.9/ounce to close at $3,856.6/ounce.
