Home / Economy / Microeconomic stability getting bolstered as inflation coming under control: RBI

The economic outlook of the country is optimistic and as the inflation rate is also falling around the tolerance limit, the macroeconomic stability is getting bolstered, the Reserve Bank of India (RBI) said in its January monthly bulletin. The central bank pointed towards narrowing the current account deficit (CAD) and said that emerging markets are appearing more resilient.

The January bulletin includes five articles and three speeches that covered different aspects of the Indian economy.

"A slowdown in growth with possibilities of recession in large swathes of the global economy has become the baseline assessment even as inflation may average well above targets," says the article 'State of the Economy'.

The year 2023 is coming with bigger risk than the previous year stemming from United States monetary policy and the US dollar, the article added.

"In India, the softening of commodity prices and other costs amidst strong revenues appears to have boosted corporate performance. Macroeconomic stability is getting bolstered with inflation being brought into the tolerance band and lead indicators suggesting that the current account deficit is on course to narrow through the rest of 2022 and 2023," it said.

Resource reallocation and technological progress are the two areas where India should focus on to attain better productivity in growth, the article 'Productivity Growth in India: An Empirical Assessment,' said. The article looked into key sectors that contributed to productivity growth and examined whether aggregate productivity growth in India was due to resource reallocation or technological progress within each sector during 2001-19.

The bulletin also sheds light on the situation of fundraising capacity of Indian startups and the financing model of venture capitalists. The article 'What Drives Startup Fundraising in India?' empirically looks at factors that determine the quantum of startup funding at the economy level and at the firm level.

Open market operations (OMO) is one of the principal instruments of liquidity management by the central banks and the article 'Open Market Operations in India - An Appraisal,' looks at the experience of India with the OMO and its impact on the balance sheet of RBI.

(With inputs from ANI)


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