New Delhi: India’s economy continued to show resilience amid a challenging global environment, with domestic demand providing a strong growth impulse and financial conditions improving across sectors, the Reserve Bank of India (RBI) said in its January 2026 Bulletin released on Wednesday.
According to the RBI’s assessment of the state of the economy, global growth held up in 2025 despite elevated uncertainty, which moderated further in December. Against this backdrop, India’s first advance estimates for 2025-26 underscored the economy’s domestic strength, even as external conditions remained uncertain.
High-frequency indicators for December pointed to continued buoyancy in economic activity, with demand conditions staying upbeat. Headline consumer price inflation edged up during the month but remained below the lower tolerance threshold, offering comfort on the price stability front.
The Bulletin also highlighted a steady pickup in credit flows to the commercial sector over the past year, driven by contributions from both banks and non-bank financial institutions. The improving flow of financial resources suggests strengthening investment and consumption dynamics in the economy, the RBI noted.
In a separate article on financial stocks and flows of funds for 2023-24, the RBI said financial assets of domestic sectors grew 13.9%, up sharply from 9.9% in the previous year, while financial liabilities rose 12.7%, compared with 10.4% earlier.
The financial resource deficit of the domestic economy narrowed significantly to 0.9% of GDP in 2023-24 from 2.3% a year ago, indicating improved balance sheet health. Households and financial corporations continued to be surplus sectors, financing the deficits of the government and non-financial corporations.
Net financial wealth of domestic sectors rose to 28.6% of GDP from 24.8% a year earlier, signalling broad-based strengthening across households, the government and non-financial firms. The RBI added that rising financial assets and liabilities of the rest of the world reflected increasing openness of the Indian economy.
The central bank clarified that the views expressed in the Bulletin articles are those of the authors and do not necessarily reflect the RBI’s official stance.