Global economy likely to shrink but worst may be over: RBI Governor

Growth projections are now skewed towards a softer recession contradicting the earlier forecasts of a severe and more widespread recession, Das said at an event in Dubai, according to a Business Standard report.

As inflation in many countries has eased, there is an expectation that central banks would lower rate hikes or pause but authorities across the world have reiterated their resolve to bring inflation closer to their targets, he said.

There is a high possibility of higher interest rates prevailing for a longer period of time, he added.

Due to a robust financial system, Indian banks and companies have shown resilience despite the tough Covid-19 period and most banks are in a better shape than pre-pandemic days.

He said the Indian economy did well amid an uncertain global environment.

The apex bank governor maintained that while the decline in domestic inflation in November and December of 2022 is a “welcome” sign, the core inflation is yet to ease.