Indian economy to record high growth despite global volatility: RBI Governor Sanjay Malhotra

Maintaining financial stability and strengthening financial system remain RBI north star, says Malhotra in his foreword in the latest edition of RBI Financial Stability Report

New Delhi: The Indian economy is projected to register high growth, driven by strong domestic consumption and investment despite a volatile and unfavourable external environment, RBI Governor Sanjay Malhotra said on Wednesday.

“Maintaining financial stability and strengthening the financial system remains our north star,” Malhotra said in his foreword in the latest edition of the RBI Financial Stability Report.

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According to him, financial sector regulators recognise that financial stability is not an end in itself and promoting innovation and growth, protecting consumers, a pragmatic approach to regulation and supervision that improves financial system efficiency are equally important.

“The most important contribution the policymakers can make is to foster a financial system that is robust and resilient to shocks, efficient in providing financial services and promotes responsible innovation,” he said.

Malhotra noted that the Indian economy and the financial system remain robust and resilient supported by strong growth, benign inflation, healthy balance sheets of financial and non-financial firms, sizeable buffers and prudent policy reforms.

“Despite a volatile and unfavourable external environment, the Indian economy is projected to register high growth, driven by strong domestic consumption and investment. Nonetheless, we recognise the near-term challenges from external spillovers and continue to build strong guardrails to safeguard the economy and the financial system from potential shocks,” he said.