New Delhi (TIP)- India’s domestic economy held steady in June and July, showing resilience amid global macroeconomic uncertainty driven by geopolitical tensions and trade-related risks, the Reserve Bank of India said in its latest monthly State of the Economy report.
The central bank said on Wednesday that improved prospects for kharif or monsoon crops, steady momentum in the services sector, and modest industrial growth supported overall activity.
“Domestic economic activity held up, with improving kharif agricultural season prospects, continuation of strong momentum in the services sector and modest growth in industrial activity,” RBI said, highlighting the economy’s relative stability amid external headwinds.
“Headline CPI inflation remained below 4% for the fifth consecutive month in June, driven by deflation in food prices,” it added. Retail inflation based on the consumer price index (CPI) rose 3.54% in July, its lowest in 59 months, according to the latest data from the Ministry of Statistics and Programme Implementation). The 5.42% rise in food inflation in July was the lowest since June 2023, when it was 4.55%.
To be sure, retail inflation has been below the 6% mark since September, remaining within the central bank’s tolerance range of 2-6% for 11 consecutive months.
Services sector output rose to a 10-month high in June, driven by higher sales and new order intakes, and positive demand trends.
The seasonally adjusted HSBC India Services PMI Business Activity Index, compiled by S&P Global, rose to 60.4 in June, up from 58.8 in May, with the increase in export orders among the strongest in the series’s history, according to the survey.