New Delhi [India], July 23 (ANI): Economic activity in India held up, with improving kharif agricultural season prospects, continuation of strong momentum in the services sector and modest growth in industrial activity, said RBI in its monthly bulletin.

Headline inflation remained below 4 per cent for the fifth consecutive month in June, driven by deflation in food prices, the bulletin said.

The global macroeconomic environment remained fluid in June and July so far amid geopolitical tensions and tariff policy uncertainties.

'System liquidity remained in surplus to facilitate a faster transmission of policy rate cuts to the credit markets. The external sector remained resilient, backed by ample foreign exchange reserves and a moderate external debt-to-GDP ratio,' the State of the Economy section of the RBI bulletin said.

High-frequency indicators for industrial activity recorded modest growth in June.

'Growth in rural demand remained resilient and was accompanied by a recovery in urban economic activity,' the RBI said.

'Amidst global economic uncertainties, the front-loading of spending by the central and state governments, with a focus on higher capex, is helping to offset some slowdown witnessed in private capex expenditure.'

India's merchandise trade deficit narrowed in June 2025, due to contraction in both oil and non-oil trade deficit, the RBI report affirmed.

All in all, amidst a challenging global environment, the Indian economy showed resilience, the central bank bulletin said. 'High-frequency indicators suggest stability in aggregate demand. Growth momentum was buoyant for agriculture and services sector while the growth in industrial sector remained modest.'

The high-frequency indicators for overall economic activity showed mixed signals in June. E-way bills and toll collection showed strong growth, while growth in Goods and Services Tax (GST) revenue collections moderated sharply in June, the bulletin noted. (ANI)