India: RBI revises growth expectation from 6.7 % to 6.5% in FY25-26, Amdist Tariff challenges
Mumbai: India's real GDP is revised downwards to grow at 6.5 per cent in the current financial year 2025-26 from earlier expectation of 6.7 per cent, highlighted Reserve Bank of India (RBI) Governor Sanjay Malhotra during the policy announcement on Wednesday.
The Governor highlighted that this growth projection comes after a strong performance of 9.2 per cent growth recorded in the previous financial year, 2024-25, as per figures released by the Ministry of Statistics and Programme Implementation (MOSPI).
He said "The real GDP as you are all aware, this year, as per the MOSPI figures, is expected to grow at 6.5 per cent. This is on top of a 9.2 per cent growth rate observed in the previous year, which is 2024-2025".
Speaking on the outlook for the economy, Malhotra said the agriculture sector is expected to perform well this year due to healthy reservoir levels and strong crop production.
He noted that manufacturing activity is also picking up pace, with business expectations remaining positive. Meanwhile, the services sector continues to show resilience, contributing steadily to economic growth.
He acknowledged that growth is improving after a weak performance in the first half of the last financial year, although it still remains below the level the country aspires to achieve.
On the demand side, the Governor said the positive outlook for agriculture is likely to support rural demand, which remains strong. Urban consumption is also gradually increasing, helped by a rise in discretionary spending.
Investment activity, he added, has gathered momentum and is expected to improve further. This improvement is being driven by sustained and higher-capacity utilization, continued government spending on infrastructure, strong balance sheets of banks and corporates, and easier financial conditions.
He said "Investment activity has gained traction and is expected to improve further on the back of sustained, higher-capacity utilization, government's continued trust on infrastructure spending, healthy balance sheets of banks as well as the corporates, along with the easing of financial conditions".
However, Malhotra cautioned that merchandise exports may face pressure due to global uncertainties. On the other hand, services exports are expected to stay resilient and support the overall growth momentum.
© Muscat Media Group Provided by SyndiGate Media Inc. (Syndigate.info).
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