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RBI DG Gupta Flags Disconnect Between India's Strong Economy and Equity Markets
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CNBC TV18•23-09-2026, 18:32
RBI DG Gupta Flags Disconnect Between India's Strong Economy and Equity Markets
- •RBI Deputy Governor Poonam Gupta highlights India's robust economic growth, steadily moving towards an 8% growth equilibrium despite external shocks.
- •Gupta praises policymakers for maintaining certainty and avoiding common mistakes like stretching fiscal envelopes during temporary shocks.
- •She notes the Indian financial sector's stability and resilience, with stress tests confirming its strength even under harsh scenarios.
- •Despite the strong economic performance, Gupta points out a disconnect in equity markets, which haven't fully reflected the underlying optimism.
- •Gupta anticipates that the inherent strength of the economy will eventually manifest in financial markets, and expects an improving external position with a declining current account deficit and a soon-to-be positive capital account.
Key Questions Answered
RBI Deputy Governor Poonam Gupta stated that India is steadily moving towards an 8% growth equilibrium and highlighted a disconnect between the strong real economy and equity markets, which she expects should soon correct to reflect underlying economic strength.
Gupta highlighted an improving external position, noting that the current account deficit as a percentage of GDP should decline over time and expecting the capital account to turn positive very soon.
Gupta warned that countries often make the mistake of stretching fiscal envelopes to cushion the immediate impact of temporary shocks, which only creates larger growth shocks over a longer period, a policy India has avoided.
