Economic Buzz: Global growth remained resilient despite facing persistent headwinds from supply shocks, says RBI

Reserve Bank of India has stated in its latest monthly update that global growth has remained resilient despite facing persistent headwinds from supply shocks. However, the near-term growth forecasts have been revised downwards by several multilateral agencies, as key supply chains remain disrupted and crude oil prices remain elevated. Investment in artificial intelligence (AI) and related technologies, along with increased international trade in AI-related hardware, has supported global economic activity. Fiscal support across countries has sustained economic activity but also heightened concerns about rising public debt and reduced fiscal buffers. Along with higher inflation and higher-for-longer monetary policy expectations, these concerns have contributed to a sharp rise in government bond yields across major jurisdictions. The central bank noted that inflation, which had been moderating towards the end of 2025, began to accelerate following the supply shock triggered by the West Asia conflict. Crude oil prices rose to levels not seen in recent years.

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