Amdist Tariff challenges, RBI revises growth expectation from 6.7 % to 6.5% in FY25-26

ANI April 9, 2025 168 views

The Reserve Bank of India has revised its GDP growth forecast for the current financial year to 6.5%, reflecting nuanced economic challenges. This projection comes after an impressive 9.2% growth in the previous year, indicating a moderate but steady economic trajectory. RBI Governor Sanjay Malhotra highlighted promising signs in agriculture, manufacturing, and services sectors, suggesting underlying economic strength. Despite global uncertainties, the outlook remains cautiously optimistic with increasing investment activities and improving domestic demand.

"Investment activity has gained traction and is expected to improve further" - Sanjay Malhotra, RBI Governor
Mumbai, April 9: 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.

Key Points

1

RBI reduces FY25-26 growth projection from 6.7% to 6.5%

2

Agriculture and services sectors showing resilient performance

3

Investment activity gaining momentum

4

Global uncertainties may impact merchandise exports

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.

Reader Comments

R
Rahul K.
Still a decent growth projection considering global headwinds! The focus on infrastructure spending is the right move. Hope we see more manufacturing growth in coming months. 🇮🇳
P
Priya M.
I'm concerned about the rural economy though. The article mentions strong rural demand but in my village, farmers are still struggling with input costs. Hope the agriculture growth translates to better incomes.
A
Amit S.
The services sector carrying us as usual! 💪 But we really need manufacturing to pick up more to create jobs. 6.5% is good but not great - we can do better with more reforms.
S
Sunita R.
While the downward revision is small, I wish RBI would provide more concrete plans to boost exports. The global uncertainty excuse is getting old - other countries are managing better export numbers despite same conditions.
V
Vikram J.
After 9.2% last year, 6.5% feels like a slowdown. But the governor's optimism about investment activity is promising. If corporate balance sheets are indeed healthy, they should invest more in expansion and R&D.

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Tags:
RBI Economic Forecast GDP Growth Sanjay Malhotra Indian Economy Monetary Policy
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