No global recession, domestic economy is resilient: RBI Governor
New Delhi, Sep 19: Amid economic slodowm, the RBI Governor Shaktikanta Das reiterated that the mood of gloom and doom won't help fix the problems.
"Despite rising external risks, domestic economy is resilient as foreign debt is only 19.7 per cent of GDP," Das was quoted as saying by PTI.
Speaking at the Bloomberg India economic summit in Mumbai, Das called for more structural reforms to cushion the economy from rising global headwinds.
"The government must front-load budgeted spending as there is little fiscal space for countercyclical measures to boost growth," he said, adding that he expects US Fed's latest rate cut to boost fund inflows into the country, but need to be vigilant about the nature of such funds. Furthermore, Das expects inflation will continue to remain below 4% in the next 12 months.
Das also said that International environment is clouded with challenging conditions. "Global growth is slowing down and central banks across world are bracing up to counter it by easing monetary policy; but there is no recession as yet," he added.
Das said that he expects US Fed's latest rate cut to boost fund inflows into the country, mostly via Foreign Direct Investment (FDI). The Federal Open Market Committee lowered the policy interest rate by 25 basis points to a target range of 1.75 to 2.0 per cent.
The RBI Governor's remarks come weeks after data released by the National Statistical Office (NSO) had revealed that the country's GDP grew at 5 per cent, a 25-quarter low, in the first quarter (April-June) of the current fiscal.
Commenting on the impact of the recent drone attacks on Saudi oil fields which resulted in a fall of oil supply, Das said he expected the crisis to have only limited impact on inflation and the fiscal numbers given lower subsidy outgo.