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Informist, Friday, Jun. 6, 2025

 

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--Retains FY26 GDP growth forecast at 6.5%
--Retains Apr-Jun GDP growth forecast at 6.5%
--Retains Jul-Sept GDP growth forecast at 6.7%
--Retains Oct-Dec GDP growth forecast at 6.6%
--Retains Jan-Mar GDP growth forecast at 6.3%
--Risks to growth forecasts are evenly balanced
--We are already growing at a faster pace, aspire to grow more
--We aspire to grow at a higher rate
--Growth remains lower than aspiration
--Imperative to provide policy stimulus
--Spillover from protracted geopolitical tensions pose risk to growth
--Policy actions should be seen as step towards boosting growth
--Important to focus on domestic growth amid global uncertainty
--Global environment remains uncertain
--No tussle between price stability, growth in medium-term
--No tussle between price stability, growth in long-term
--Global econ uncertain, more important to focus on local growth
--RBI Malhotra: Growth will depend on macro-economic factors 
--RBI Malhotra on if govt should support growth: Everyone must do their bit 
--RBI Malhotra on growth: Expect everyone else to do their bit 
--RBI Malhotra: "I believe in doing my work" on boosting growth 
--RBI Malhotra: Growth aspiration between 7-8% 
--RBI Malhotra: Difficult to estimate exact impact of policy on growth 
--RBI Malhotra: Expect impact of policy on growth in second half of FY26 
--RBI Malhotra: Expect positive impact of policy on growth 
--RBI Malhotra: Scope to boost growth further 
--RBI Malhotra: Want GDP to grow as fast as possible
--RBI Malhotra: Conclusion of FTAs with UK, others should provide relief 

 

NEW DELHI – The Reserve bank of India Friday retained its GDP growth projection of 6.5% for 2025-26 (Apr-Mar). The central bank also retained its growth estimtes for each of the four quarters of the current fiscal year.   

 

The quarterly break-up of the RBI's latest growth forecasts is as follows: 6.5% for Apr-Jun, 6.7% for Jul-Sept, 6.6% for Oct-Dec, and 6.3% for Jan-Mar. After National Statistics Office's data showed that the GDP grew 6.5% in FY25, slowest in four years, the RBI decided to cut the policy repo rate by 50 basis points to 5.5%, and also changed its stance to 'neutral' from 'accommodative'. 

 

There was very limited space left for the Monetary Policy Committee to support growth, hence, the panel decided to change its stance at its meeting this week, RBI Governor Sanjay Malhotra explained in his statement. The RBI's growth projection for FY26 is in line with that of the finance ministry, which expects the GDP to expand in the range of 6.3-6.8% in the current year. 

 

Although the Indian economy is growing at a faster pace amid challenging global environment and heightened uncertainty, the GDP growth remains lower than the RBI's aspirations, Malhotra said. "Thus, it is imperative to continue to stimulate domestic private consumption and investment through policy levers to step up the growth momentum."

 

With the expectation of an above normal monsoon rains this year, the farm sector outlook is bright, which may drive rural demand, Malhotra said. Sustained buoyancy in services activity would nurture a revival in urban consumption. Healthy balance sheets of banks and corporates, government's continued thrust on capital expenditure, improving business optimism, and easing of financial conditions should help further revive investment activity, Malhotra added. 

 

"Spillovers emanating from protracted geopolitical tensions, and global trade and weather-related uncertainties pose downside risks to growth," Malhotra said. "The risks are evenly balanced."

 

The RBI's policy measures are likley to show positive impact on India's GDP growth from October, according to Malhotra. But he also added that it would be difficult to estimate the extent of the impact, considering the uncertain gepolitical environment. The RBI wants the economy to grow as fast as possible, and aspires for a level close to 7-8%, Malhotra said at the post policy press conference.  

 

Malhotra expects the free-trade agreement with the UK and a deal with ther nations to provide some relief to the economy in terms of growth, he said. India and the UK concluded negoitions for a trade deal last month. Both the sides are currently engaged in leagal scrubbing of the text of the pact, according to the Indian commerce ministry. It would take over a year in ratification of the agreement. India is also discussing trade deals with the US and the European Union and discussions for both of them are in an advanced stage. 

 

Besides, growth will also depend on other macro-economic factors, Malhotra said. "I believe in doing my job and we have done that bit. It is expected that everyone else will be doing their bit," Malhotra responded when asked if he expected fiscal measures to support growth, considering there was "very limited space left for the monetary policy to support growth".  End  

 

Reported by Krity Ambey

Edited by Akul Nishant Akhoury

 

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