India’s economy showed strong resilience during the first half of fiscal year 2025-26, from April to September, thanks to solid consumer spending, rising investments, and steady government outlays. Inflation stayed lower than expected, helped by steady food prices and key GST reforms that eased business costs.
A well-balanced external sector, ample liquidity, and thriving financial markets kept the overall economy stable, an official government statement noted.
The Reserve Bank of India (RBI) wrapped up its 57th Monetary Policy Committee meeting by holding the repo rate steady at 5.50 percent, sticking to a neutral policy stance. This move reflects a smart balance that keeps economic growth humming while protecting financial stability. The RBI’s report points to tough domestic demand, easy access to credit, and a steady global position, painting a cautiously upbeat picture for India’s economy.
In a positive update, the central bank bumped up its GDP growth forecast for FY 2025-26 to 6.8 percent, from the previous 6.5 percent estimate. Strong consumption, investments, and government spending drive this momentum, boosted by a bountiful monsoon, the rollout of GST 2.0, improved credit availability, and higher factory output levels.
India’s real GDP jumped 7.8 percent in the first quarter of FY 2025-26, faster than the 7.4 percent in the prior quarter and the quickest pace in seven quarters. This surge came from robust investments and consumer activity.
Consumer confidence is on the rise too, with the future expectations index climbing for both city and rural families, staying firmly in positive territory.
Global experts echo this optimism about India’s economic growth prospects, even as world uncertainties linger. The International Monetary Fund (IMF) projects 6.4 percent growth for FY26. Fitch Ratings sees 6.9 percent for FY26 and 6.3 percent for FY27. S&P Global forecasts 6.5 percent, while the United Nations expects 6.3 percent in FY26 and 6.4 percent in FY27. India’s Confederation of Indian Industry (CII) predicts 6.4 to 6.7 percent, and the OECD anticipates 6.7 percent.
These forecasts highlight India’s robust domestic demand, growing investments, and stable external sector as major strengths. Smart policies, ongoing structural reforms, and a booming services industry add extra fuel to this high-growth trajectory amid global headwinds.
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