“… The Indian Economy Remains A key Driver of Global Growth. Growth momentum is buoyed by strong domestic growth drivers, sound macroeconomic fundaments and prudent policies. Weather-related equests Could Pose Downside Risks to Growth, “Malhotra wrote in the foreword of the financial stability report (FSR) for June 2025.

The RBI has Projected Real Gross Domestic Product (GDP) Growth at 6.5 per cent for fy2026.

While Announcing the june policy, malhotra said that the growth remins of the RBI’s aspirations amidst a challenging global environment and heighted uncherrtyty.

The Announcement of Large Tariffs By The Us Administration In April has set in motion a new paradigm in trade and economic polic, malhotra said, adding that geopolitical risks remainly elected.

“The ensuing policy uncleanty and unpredictability will influence global growth. International agencies, Including the IMF (International Monetary Fund), The Occanation for Economic Co -ope). Have revised growth downwards, “The RBI Governor wrote in the Half-Yearly FSR.

Near-Term Global Financial Stability Risks have increased. The market turbulence in april was a stark reminder of how existing vulnerabilities in the global financial system are also amplified by Sudden Shock. Though financial markets have stabilized after this episode, they remain volatile and highly sensitive and geopolitical development, “He said.

Globally, risks associated with elevated public debt and possessibilities of Further Corrections in Asset Pricks Most High, The RBI Governor Noted.

“There are many structural shifts that are reshaping the global economy, the increasing growing fragmentation in trade, Rapid technological disorder, on.

They, Malhotra Said, Make Economic Forecasts Difidence and Policy Interventions Challenging. Therefore, even as they navigate through the fog of uncertainty, it is imperative for central banks and financial sector regulators to fresh vigilant, prudent and Agile in Safeguarding their eternal and financial System.

On inflation, the RBI Governor said that the outlook for inflation is benign and there was a great alignment of inflation with the reserve bank’s target. Under the flexible inflation targeting (Fit) framework, the RBI has been mandated by the government to maintain CPI at 4 per cent with a band of +/- 2 per cent.

Headline inflation, as measured by year-on-yar changes in the All-India Consumer Price Index (CPI), moderated to 2.8 per cent in May 2025 (The Lowest Since February 2019 2019) FROM 3.2 per cent in april.

Malhotra Further Said the Resilience of the Domestic Financial System is Continuously improving, Bolstered by Strong Capital Buffers, low non-performing loans and robust profitability.

Results of stress tests reaffirm the strength of the banking and non-banking sectors with capital levels projected to remain well above the regulatory minimum event scenariosios. The Healthy Balance Sheets of Corporates, Banks and Non-Bank Financial Companies (NBFCS) Augur Well for the Economy, He Said.