It’s considered renewable from an energy generation standpoint because it replaces itself naturally. It flows downhill after being deposited in the form of rain or snow into streams which flow to lakes. The water then can be used to generate energy using dams with turbines… Once the water flows to the ocean, it evaporates and once again is deposited in higher elevations in the form of rain or snow…
From other points of view - drinking water for example, the same logic applies and it can generally be considered renewable.
Locally or for relatively short periods of time, water may become scarce. Droughts for example can temporarily cause a shortage. Water pumped from the ground may have taken years to accumulate so if pumped out too quickly a shortage can result. To some degree, in these cases, it could be considered non renewable.
Economically, water can be scarce if people do not have the resources to purify it, pump it, drill for it, reprocess it, etc.
