The RBI has projected India’s GDP growth at 6.5 per cent, with domestic economic activity showing resilience on the back of a strong agriculture sector
MUMBAI — The RBI has projected India’s GDP growth at 6.5 per cent for
2025-26, with domestic economic activity showing resilience on the back of a
strong agriculture sector, industry picking up, and the services sector
expected to maintain momentum.
The quarterly growth rates projected for the financial
year are: Q1 at 6.5, Q2 at 6.7, Q3 at 6.6 and Q4 at 6.3 per cent.
“The provisional estimates released by the National
Statistical Office (NSO) placed India’s real GDP growth in 2024-25 at 6.5 per
cent. During 2025-26 so far, domestic economic activity has exhibited
resilience. The agriculture sector remains strong. With a very good harvest in
both the kharif as well as rabi cropping seasons, the supply of major food
crops is comfortable. The reservoir levels remain healthy. The highest
procurement of wheat in the last four years provides a comforting stock
position,” RBI Governor Sanjay Malhotra said on Friday.
Industrial activity is gradually increasing, even though
the pace of recovery is uneven. The services sector is expected to maintain
momentum. PMI services stood strong at 58.8 in May 2025, indicating robust
expansion in activity, he pointed out.
The RBI Governor stated that on the demand side, private
consumption, the mainstay of aggregate demand, remains healthy, with a gradual
rise in discretionary spending. Rural demand remains steady, while urban demand
is improving. Investment activity is reviving as reflected by high-frequency
indicators.
Merchandise exports recorded a strong growth in April
2025 after a lacklustre performance in the recent past. Non-oil, non-gold
imports posted a double-digit growth, reflecting buoyant domestic demand
conditions. Services exports continue on a strong growth trajectory, he
explained.
Malhotra further stated that going forward, the outlook
for the agriculture sector and rural demand is expected to receive further
impetus from the expected above-normal southwest monsoon rainfall. On the other
hand, sustained buoyancy in services activity should nurture revival in urban
consumption.
The government’s continued thrust on capex, elevated
capacity utilisation, improving business optimism, and easing financial
conditions should help further revive investment activity, he observed.
Trade policy uncertainty, however, continues to weigh on
merchandise exports prospects, while the conclusion of a free trade agreement
(FTA) with the United Kingdom and progress with other countries should provide
a fillip to trade in goods and services, the RBI Governor pointed out.
He also said that spillovers emanating from protracted
geopolitical tensions, global trade and weather-related uncertainties pose
downside risks to growth.
