NEW DELHI: The Reserve Bank of India (RBI) Governor Sanjay Malhotra said that India's macroeconomic fundamentals remain robust despite geopolitical tensions and flagged risks from high public debt in major economies.
The RBI Governor warned that continued fiscal expansion abroad, together with rising defence spending amid geopolitical tensions, could strain global fiscal sustainability.
He cautioned that stretched valuations in some asset classes, especially in the technology sector, could pose broader risks for markets.
Speaking at the 25th FIMMDA PDAI Annual Conference in Amsterdam, The Netherlands, Malhotra said India's macroeconomic fundamentals remained robust supported by strong consumption and sustained public investment, despite macroeconomic headwinds from geo political tensions.
The government's focus on capital expenditure has helped crowd in private investment and expand productive capacity, Malhotra said.
The RBI Governor said the disrupted supply chains and rising energy prices "has already affected economic activity."
"If the crisis persists longer, it may also translate into second order inflationary pressures," Malhotra said.
The central bank will move ahead with efforts to deepen financial markets, broaden participation and strengthen institutional frameworks as global uncertainty mounts, he said, adding financial markets in India had matured significantly due to policy efforts but required further progress.
"We will continue to deepen financial markets, broaden participation, and further strengthen institutional frameworks. We will continue to strive for efficiency, consumer protection, fairness, transparency, and ethical conduct. In this pursuit, we will continue to assess and meet the emerging market needs," he said. (IANS)
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