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Informist, Wednesday, Oct. 1, 2025

 

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--FY26 GDP growth projections revised upward
--Hikes FY26 GDP growth forecast to 6.8% from 6.5%
--Hikes Jul-Sept GDP growth forecast to 7.0% from 6.7?rlier
--Cuts Oct-Dec GDP growth forecast to 6.4% from 6.6?rlier
--Cuts Jan-Mar GDP growth forecast to 6.2% from 6.3?rlier
--Cuts Apr-Jun FY27 GDP growth estimate to 6.4% from 6.6?rlier
--MPC noted growth outlook resilient despite weak demand
--Growth continues to remain below aspirations
--Trade related headwinds to weigh on growth Q3, Q4
--Opened up policy space to further support growth
--Real GDP growth surprised to the upside in Q1
--Global factors pose downside risks to growth outlook

 

NEW DELHI – The Reserve Bank of India Wednesday raised its GDP growth projection for 2025-26 (Apr-Mar) to 6.8% from 6.5% projected earlier. The central bank also raised its growth estimate for the September quarter to 7% from 6.7%.

 

However, the RBI slashed its growth projections for the remaining quarters of the current fiscal year as well as for Apr-Jun of FY27. The central bank has cut its forecast for Oct-Dec to 6.4% from 6.6%, and to 6.2% from 6.3% for Jan-Mar. The RBI also cut its growth projection for the June quarter of FY27 to 6.4% from 6.6%. The central bank sees trade-related headwinds weighing on economic growth in the last two quarters of the fiscal year, RBI Governor Sanjay Malhotra said while giving the projections.  

 

According to the data released earlier by the statistics ministry, India's GDP grew 7.8% in Apr-Jun, which was a surprise on the upside, Malhotra mentioned in his policy statement. The RBI's growth projection for FY26 is in line with that of the finance ministry, which expects GDP to expand in the range of 6.3–6.8% in the current year. 

 

The RBI's Monetary Policy Committee at its latest meeting decided to leave the policy repo rate unchanged at 5.50% and maintain the 'neutral' stance adopted in June.

 

While the macroeconomic conditions and the outlook opened up policy space for further supporting growth, the impact of the front-loaded monetary policy actions and the recent fiscal measures is still playing out, hence the MPC decided to maintain status quo, Malhotra said. 

 

Domestically, the Indian economy is well-placed with strong consumption demand, which is expected to get a further boost from the rationalisation of goods and services tax rates. However, ongoing tariff and trade policy uncertainties will impact external demand and pose downside risks to the growth outlook, the governor said. But the growth outlook remains resilient, supported by domestic drivers, despite weak external demand, according to the MPC.

 

Much of the uncertainties emanate from the shift in the US' trade policy after President Donald Trump assumed office. The US, which is India's top export destination, imposed a 50% tariff on Indian goods in August. Besides the country-specific tariff, the Trump administration has also announced extra sector-wise tariffs on pharmaceutical products, automobiles, steel, and aluminium.   

 

Malhotra repeated that India's growth continues to be below RBI's aspirations. The governor had said this in his policy statement for June as well. The RBI wants the economy to grow as fast as possible, and aspires for a level close to 7-8%, Malhotra had elaborated at the post-policy press conference in June.  End

 

 

Reported by Krity Ambey

Edited by Deepshikha Bhardwaj

 

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