India’s economy is in a strong, capable and healthy position despite the effects of the West Asia conflict and global uncertainties, Reserve Bank of India Governor Sanjay Malhotra said during the post-Monetary Policy Committee press conference on Friday. He noted that while the global shock affects many nations, India is better placed than others, with GDP growth around 6.5 percent unmatched by major economies. Inflation may rise with fuel prices but is expected to be temporary. The country’s financial strength, banking sector, corporate balance sheets and foreign reserves covering 11 months of imports provide a solid buffer, he added. The RBI aims to manage the situation and turn challenges into opportunities. Malhotra stressed the need for prudent and non-wasteful behavior in line with earlier public advisories. Key concerns include the conflict’s duration, supply chain recovery and its effect on prices, along with monsoon and El Nino risks. The central bank has revised its FY27 growth forecast down to 6.6 percent and raised the inflation projection to 5.1 percent, assuming crude oil at 95 dollars per barrel. The MPC kept the repo rate unchanged at 5.25 percent with a neutral stance.
