Domestic financial markets are seeing corrections with relentless hardening of the US dollar and equities being under pressure from persistent portfolio outflows, according to Reserve Bank of India (RBI). The medium-term outlook remains bullish as the innate strength of the macro-fundamentals reasserts itself. Headline consumer price index (CPI) inflation rose above the upper tolerance band in October 2024 with a sharp surge in the momentum of food prices along with an increase in core inflation. RBI noted that In India, the slack in speed observed in the second quarter of 2024-25 is behind us as private consumption is back to being the driver of domestic demand with festival spending lighting up real activity in Q3. India's services sector is expected to sustain its growth momentum, robust job creation, and high consumer and business confidence, the central bank noted.

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