Persistently high inflation globally is to stay here longer than anticipated as the ongoing war and sanctions take a toll on economies, threatening a further slowdown to global trade volume, RBI said in its financial stability report released on Thursday.
The global economic outlook is clouded by the ongoing war in Europe and the pace of monetary policy tightening by central banks in response to mounting inflationary pressures, the Reserve Bank of India (RBI) report said.
Albeit the domestic economy is facing spillovers from the global conditions, it remains on a recovery path.
“The financial system remains resilient and supportive of economic revival. Banks, as well as non-banking institutions, have sufficient capital buffers to withstand sudden shocks. High inflationary pressures, external spillovers and geopolitical risks warrant careful handling and close monitoring,” as per the FSR (Financial Stability Report).
RBI said the shock waves from…