India on the path to becoming the fastest-growing economy: RBI

Despite the downfall of the Indian rupee, the Reserve Bank of India said that the country is on course to become the fastest growing economy in the world. The RBI bulletin said India's economy has remained resilient before global changes and inflation.

Addressing the recent changes in international politics and trade, the RBI said there are sparks in the wind that ignite the innate strength of the economy. The Central bank, however, did not mention when the economy of the country will change course.

The bulletin noted that the recent revival of the southwest monsoon and renewed planting raised expectations that rural demand will soon catch up with urban spending and consolidate a recovery. "Knock-on effects of geopolitical spillovers are visible in several sectors, tapering the pace of recovery," added RBI.

According to last week's data, India's annual consumer inflation is above 7% and has remained so for six months in a row. The bank named global supply chain issues to be the source of upward inflation in the country.

About the inflation concerns, the RBI bulletin stated that if the commodity price moderation witnessed in recent weeks endures alongside the easing of supply chain pressures, the worst of the recent surge in inflation will be over, reported Reuters.

The central bank observed that India's current account deficit (CAD)could widen to 2.3% of GDP in 2022/23 if oil prices average $105 per barrel. " It would widen to 2.8% if oil averages $120 per barrel but remain within the sustainable limit of 3%."