The Reserve Bank Of India (RBI) stated in its latest monthly update that the ongoing geopolitical crisis has heightened the uncertainty clouding the global macroeconomic and financial landscape even as the world economy struggles to recover from the pandemic. As the conflict escalates, oil and other commodity prices are blazing to multi-year highs, and financial markets are on edge, driven by massive sell-offs.
Amidst these testing times, the Indian economy is experiencing spillovers as it recovers from the third wave of the pandemic. Consumer and business confidence are rising alongside improvement in demand conditions. On the supply side, a resilient farm sector and a sustained retrieval in both industrial and services sectors are broadening the recovery.
Spiraling oil and gas prices and unsettled financial market conditions pose fresh headwinds to the still incomplete global recovery. Amidst these testing times, India is making steady progress on the domestic front as it recovers from the third wave. India's macroeconomic fundamentals remain strong. Unfolding global developments nevertheless pose downside risks in terms of spillovers.
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