The Reserve Bank of India on Thursday said the macroeconomic risks to the Indian economy have increased over the last six months due to the fall in growth,external sector developments and subdued performance of the industry.
The macroeconomic risks to the economy have increased over the past six months,mainly on the dimensions of domestic growth,external sector and corporate sector performance, the apex bank said in its biannual Financial Stability Report (FSR).
The report said financing the high current account deficit (CAD),which hit an all-time high of 4.8 per cent of GDP in FY13 a key concern on the external front is a stress point for the economy as evident from the recent rupee depreciation on global cues. Indias growth dipped to a near-decadal low of 5 per cent in FY13 due to project delays and lack of decision-making at the government level apart from external factors like a slowdown in the global economy.
Going ahead the improvement in the quality of fiscal consolidation will be crucial for ensuring sustainable high growth and macroeconomic stability,the FSR report said.
The report said performance of corporate sector has been subdued and flagged concern over corporates increasing external borrowing and unhedged exposures,saying this can further increase their vulnerabilities.
Domestic savings rate at 31%
MUMBAI: Gross domestic savings as a proportion to GDP fell from a high of 36.8 per cent in FY08 to 30.8 per cent in FY13,the RBI said.
The apex bank blamed the sharp fall in domestic savings on the steep decline in financial savings of households which dropped from 11.6 per cent of GDP in FY08 to a poor 8 per cent in FY13. PTI
Bank asset quality better in March
MUMBAI: The RBI in its Financial Stability Report said that the asset quality of banks has improved in the January-March quarter this year with the gross non-performing assets ratio declining to 3.4 per cent of total loans outstanding,from 3.6 per cent in the July-September quarter last year. PTI