Indian Economy : The Indian economy is showing strength and stability and the gross domestic product (GDP) growth rate is estimated to be 6.6 percent in the current financial year. This estimate was made in a report of the Reserve Bank of India (RBI) on Monday. The central bank said that the economy has been supported by improvement in rural consumption, a boom in government consumption and investment and strong service exports.

The Reserve Bank has released the December 2024 issue of the Financial Stability Report (FSR). The report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the Indian financial system and risks to financial stability. It said, "Scheduled Commercial Banks (SCBs) are in a good position due to increased profits, reduction in non-performing assets, adequate capital and cash reserves. Return on assets (ROA) and return on equity (ROE) are at the highest level of the decade, while the gross non-performing asset (GNPA) ratio has come down to a multi-year low. "

The report also said that extensive stress testing shows that most SCBs have adequate excess capital to weather adverse scenarios.

Regarding the economy, the FSR said that gross domestic product (GDP) growth would decline to 6 per cent during the first half of 2024-25 from 8.2 per cent and 8.1 per cent in the first and second half of 2023-24, respectively.

RBI said, "Despite this recent slowdown, structural growth drivers remain intact. GDP growth is expected to improve in the third and fourth quarters of 2024-25 due to domestic drivers, primarily public consumption and investment, and strong service exports." Regarding inflation, the report said that food prices are expected to soften going forward due to bumper Kharif and Rabi crops. However, risks remain due to rising trends of extreme weather events. Geopolitical conflicts may put pressure on global supply chains and commodity prices.