RBI warns of fragile economic balance as inflation pressures mount. The central bank flagged increased downside risks to global growth while inflation concerns intensify. Domestic economic activity shows resilience in some segments but early deceleration signs are emerging. PMI-based output growth has slowed to its weakest pace since mid-2022, signaling caution ahead. Business surveys reveal cost pressures and uncertainty are dampening new orders and output. Consumer confidence is softening and business optimism is moderating. Adding to concerns, HSBC downgraded India to underweight, citing inflationary pressure from rising petro product prices and potential slowdown in foreign flows due to rupee depreciation. The Indian economy faces a delicate outlook as multiple headwinds converge.
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