However, the downside to a widening current account deficit is expected to be limited by a robust services export performance through the rest of the year and by inward remittances, it said.
Inflation pressures have been easing, with retail and wholesale inflation falling to 11- and 21-month lows, respectively, in November.
Core inflation, however, continues to remain sticky and persisted at an elevated level of 6 per cent in November this year, partially reflecting increased pass-through of high manufacturing costs to consumer prices as demand continues to recover swiftly, it said.
No country can afford to sit on its laurels, India included, it said, adding that continued commitment to macroeconomic stability will underpin both economic performance and investor interest in India.
''The latter is very high, currently. It needs to be nurtured. Going forward, India needs to focus on medium-term challenges such as securing technology and resources for energy transition and skilling its youth for the 21st-century economy while staying the course on fiscal consolidation at the general government level,'' it added.
ALCHEMPro News Desk (DS)
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