US-Iran thaw to provide tailwinds for growth: RBI
The Reserve Bank on Tuesday said the interim peace deal between Iran and the US can provide tailwinds to Indian economic growth. In its bi-annual financial stability report released on Tuesday, the central bank also said that the growth in gold imports has decelerated “substantially” in May 2026 over April.
It, however, flagged that fiscal deficit can come under pressure because of the higher prices of energy and other commodities, their limited pass-through to pump prices, excise duty cuts and higher outgo on subsidies. “‘... the interim peace deal has laid the foundation for cessation of this conflict and normalisation of supply chains, which could provide tailwinds to growth,” the report said.
The country entered the recent bout of global turbulence triggered by the West Asia conflict with stronger macroeconomic fundamentals, it said, conceding that while India’s resilience provides an important buffer, some impact is inevitable given the country’s substantial dependence on imported energy.
The RBI said most of the high-frequency indicators for April-May 2026 point to continued resilience in economic activity, which suggests that growth has remained “firm” in Q1FY27.
“Nevertheless, elevated oil and other commodity prices and weaker global growth could adversely affect India’s domestic growth in 2026-27,” it said.
