India's Growth Momentum Remains Resilient Amid Global Shocks, Says RBI Deputy Governor Poonam Gupta

India's economic growth momentum has remained strong despite navigating multiple global and domestic shocks, according to Reserve Bank of India (RBI) Deputy Governor Poonam Gupta. Speaking at the Business Standard BFSI Insight Summit, Gupta highlighted that the economy expanded by 7.8 per cent in the first quarter of the current financial year, with positive momentum extending into the second quarter.

Key Drivers and Resilience

Gupta noted that India has faced a diverse array of disruptions, including high US tariffs, surging oil prices, deficient monsoon rainfall, and capital outflows driven by global investors shifting focus toward artificial intelligence activities. Despite these challenges, the economy has maintained robust performance due to:

• A diversified growth base spanning multiple sectors and regions.
• Improved policy responses, macroeconomic stability, and financial resilience.
• Enhanced productivity and structured stakeholder coordination across government departments, state governments, the private sector, and households.

Fiscal Position and Inflation Outlook

Addressing public finances, Gupta contrasted India's trajectory with global trends. While global public debt is projected by the IMF to reach 100 per cent of GDP by 2029, India's general government debt-to-GDP ratio is projected to decline from around 84 per cent in 2025 to 75 per cent by 2041-42, supported by improved fiscal expenditure quality and transparency.

On inflation, she pointed to ongoing global price pressures driven by oil, weather disruptions, and shipping costs. IMF projections cited by Gupta indicate India's inflation moving from 2 per cent in 2025 to 5 per cent in 2026 before easing to 4.4 per cent in 2027. She emphasized that monetary policy must remain focused on price stability while distinguishing temporary supply shocks from persistent pressures.

Emerging Global Financial Risks

Gupta also highlighted three key risks outlined in the IMF's Global Financial Stability Report:

• Potential corrections in artificial intelligence-related asset prices if earnings disappoint.
• Sharp increases in sovereign bond yields due to renewed inflation.
• Rising cyber threats posing systemic risks to digital financial services.

To sustain a growth rate of 7 per cent and push toward 8 per cent or higher, Gupta stressed that India must continue improving sector competitiveness, technological adaptation, and human capital investments. Observers and analysts can verify policy frameworks and economic forecasts through official publications by the RBI and international bodies like the IMF.