The Reserve Bank of India (RBI) said on Monday that India’s economy is holding its own amid a shaky global environment and is on track to post strong growth.
Key indicators show a rebound in both factories and services, with capacity use and domestic demand picking up. Manufacturing and services saw robust growth, and inflation has stayed low—well under the RBI’s target rate.
Global mood has worsened. In the United States, trade and economic policy uncertainty rose in September. While worldwide growth has stuck relatively steady, investors grew more cautious in October. Rising US‑China trade tensions and a drawn‑out U.S. government shutdown dented sentiment that had been high.
In its bulletin, the RBI noted that India’s economy has stayed resilient. “High‑frequency data shows a fresh rise in urban demand and strong rural demand,” it said. Consumer‑price inflation fell sharply in September, the lowest level since June 2017.
The International Monetary Fund (IMF) lifted its GDP growth forecast for India to 6.6 % for 2025, a bump of 20 basis points. However, the IMF trimmed the 2026 forecast, citing the long‑term impact of steep U.S. import tariffs. The Organisation for Economic Co‑operation and Development (OECD) also raised its 2025 growth estimate to 6.7 % (up from 6.3 %).
RBI Governor Sanjay Malhotra highlighted that even with a tougher external backdrop, the economy remains set for high growth. “Lower inflation gives the RBI more room to support growth without risking price stability,” he said. He added that India’s goal of a “Viksit Bharat” by its 100th independence anniversary will need coordinated fiscal, monetary, regulatory and other policies.
“India’s recent GST rate rationalisation is a key step,” Malhotra said. “We will keep a close eye on incoming data, stay focused on price stability and support growth, and communicate our plans clearly and consistently.”
The RBI expects that with these measures in place, India can sustain its growth momentum and navigate global uncertainties while keeping inflation in check.
Source: ianslive
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