The global growth continues to face headwinds with persistent trade frictions, heightened policy uncertainty, and weak consumer sentiment weighing on the outlook. Despite this, the Indian economy is exhibiting resilience even after high trade and tariff-related concerns, the Reserve Bank of India (RBI) has said.

Persistent trade frictions, heightened policy uncertainty, and weak consumer sentiment continue to create headwinds for global growth.

“Amidst these challenges, the Indian economy exhibited resilience. Various high frequency indicators of industrial and services sectors sustained their momentum in April,” according to the RBI Bulletin.

A bumper rabi harvest and higher acreage for summer crops, coupled with favourable southwest monsoon forecasts for 2025, augur well for the agriculture sector.

Headline CPI inflation fell for the sixth consecutive month to its lowest since July 2019, primarily driven by the sustained easing in food prices. Domestic financial market sentiments, which remained on edge in April, witnessed a turnaround since the third week of May, said the Bulletin.

The year-on-year inflation rates based on the all-India consumer price index for agricultural labourers (CPI-AL) and rural labourers (CPI-RL) for April this year eased further to 3.48 per cent and 3.53 per cent, respectively -- compared to 7.03 per cent and 6.96 per cent in April 2024 -- bringing respite to poor households.

Also, the domestic equity market, which declined initially in response to the tariff announcements by the US, gained momentum in the second half of April in the wake of robust corporate earnings reports for Q4 by some banking and financial sector companies.

Moreover, the growth rate in notes in circulation (NiC, in value terms) during 2014-2024 was significantly lower as compared to that in the previous two decades.

The growth in NiC was noticeably higher than that in GDP during 1994 - 2004; the gap, however, has significantly reduced in the next two decades.

There exists positive relationship between nightlights and taxes and also between nightlights and GDP. It means that formal economic activity reduces the use of banknotes, said the Bulletin.