RBI Lowers GDP Growth Projection to 6.5% for FY26
Revised Forecast Amid Global Uncertainties
The Reserve Bank of India (RBI) has revised India’s GDP growth projection for the fiscal year 2025-26, lowering it to 6.5% from the earlier estimate of 6.7%. This adjustment comes in light of mounting global trade and policy uncertainties.
Bright Outlook for Agriculture
RBI Governor Sanjay Malhotra announced the revision during the first bi-monthly Monetary Policy Committee (MPC) meeting of FY26. He stated that the agricultural sector remains promising due to healthy reservoir levels and robust crop production expected throughout the year.
Revival in Manufacturing, Resilient Services
The manufacturing sector is reportedly showing signs of revival, with business expectations remaining robust. Simultaneously, the services sector continues to demonstrate resilience, contributing positively to the overall economic outlook.
Investment on the Rise
Investment activities have gained momentum, driven by:
– Sustained high capacity utilisation
– Government’s focus on infrastructure spending
– Strong bank and corporate balance sheets
– Easing financial conditions
These factors are expected to further support economic expansion in the coming quarters.
Global Trade Challenges
Despite domestic positives, external pressures loom large:
– Merchandise exports face risks from global trade disruptions
– Services exports remain more stable and resilient
Governor Malhotra highlighted that global volatility continues to influence India’s economic trajectory.
Quarterly Growth Breakdown
The RBI forecasts GDP growth for FY26 as follows:
– Q1: 6.5%
– Q2: 6.7%
– Q3: 6.6%
– Q4: 6.3%
Balanced Risks with High Uncertainty
While risks to growth are considered evenly balanced, the RBI warned that uncertainties remain elevated, particularly due to global economic shifts. The 20 basis point downward revision reflects caution over the evolving global landscape.
Category: Economy
Tags: RBI, GDP, FY26, Monetary Policy, Sanjay Malhotra, Global Economy
