GG News Bureau
Mumbai, 7th Feb. The Reserve Bank of India (RBI) on Friday raised the country’s real GDP growth forecast for 2025-26 to 6.7%, citing expectations of a robust rabi crop output and recovery in industrial activity. The central bank also projected consumer price index (CPI) inflation to moderate to 4.4% in Q4 of FY 2024-25 and further decline to 4.2% in FY 2025-26.
Economic Growth Projections
RBI Governor Sanjay Malhotra highlighted that a healthy rabi harvest, strong household consumption aided by tax relief in the Union Budget 2025-26, and recovery in fixed investment will drive growth. He noted that fixed investment is expected to improve, supported by higher capacity utilization, strong corporate balance sheets, and continued capital expenditure by the government.
The quarterly GDP growth projections for FY 2025-26 are:
- Q1: 6.7%
- Q2: 7.0%
- Q3 & Q4: 6.5% each
The RBI had earlier revised the GDP growth estimate for FY 2024-25 to 6.6%, down from its previous projection of 7.2%.
Challenges & Global Headwinds
Malhotra pointed out risks to growth from global economic uncertainties, climate change, geopolitical tensions, and financial market volatility. He stated that while global trade is resilient, the strong US dollar is impacting emerging market currencies, including the Indian rupee. The RBI is closely monitoring currency fluctuations to ensure stability.
Inflation Outlook
The central bank expects food inflation to ease due to good kharif production, falling vegetable prices, and positive rabi crop prospects. However, uncertainties in global financial markets, energy prices, and adverse weather conditions remain key upside risks to inflation.
The RBI’s inflation forecast for FY 2025-26 is as follows:
- Q1: 4.5%
- Q2: 4.0%
- Q3: 3.8%
- Q4: 4.2%
The RBI Governor reaffirmed that the central bank is taking all necessary measures to maintain economic stability, with a balanced approach to growth and inflation management.
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