How is India’s economy showing resilience in April-September?
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Synopsis
India's economy has shown remarkable resilience from April to September in FY 2025-26, driven by robust consumption, investments, and government spending, while inflation remains controlled. This article examines the factors contributing to this economic stability and the optimistic forecasts from various global agencies.
Key Takeaways
- India’s economy remained resilient during April-September FY 2025-26.
- Strong consumption and investments are key growth drivers.
- Inflation stayed below projections due to favorable food prices.
- GDP growth forecast revised to 6.8 percent.
- Consumer optimism remains strong among urban and rural households.
New Delhi, Oct 2 (NationPress) India’s economy has shown remarkable resilience during April-September of FY 2025-26, bolstered by strong consumption, investments, and government spending. Inflation has remained below expectations, aided by favorable food prices and GST reforms.
The overall macroeconomic stability is underpinned by a well-balanced external sector performance, stable liquidity, and healthy financial markets, as stated in an official announcement.
Following the recently concluded 57th meeting of the Monetary Policy Committee (MPC), the Reserve Bank of India (RBI) has decided to keep the repo rate steady at 5.50 percent with a neutral stance.
This indicates a balanced approach aimed at fostering economic momentum while ensuring financial stability. The report further emphasizes resilient domestic demand, supportive financial conditions, and a stable external sector, reflecting a cautiously optimistic outlook for the Indian economy, as noted by the government.
The Central Bank has also revised India’s GDP growth forecast for FY 2025-26 upwards to 6.8 percent, an increase from the previous estimate of 6.5 percent.
The statement indicates that domestic growth is thriving due to strong consumption, investments, and government spending, supported by favorable factors such as a good monsoon, GST 2.0, improved credit flow, and increasing capacity utilization, which all contribute to a positive outlook.
India’s real GDP grew 7.8 percent in Q1 FY 2025-26, up from 7.4 percent in the previous quarter, marking the fastest pace in seven quarters, driven by strong investment and consumption.
Consumers’ optimism for the upcoming year, gauged by the future expectations index, has further strengthened for both urban and rural households, remaining in optimistic territory.
Simultaneously, several global agencies have affirmed India’s robust economic growth prospects, underscoring the nation’s resilience amidst global uncertainties.
Notable projections include the IMF (FY26: 6.4 percent), Fitch (FY26: 6.9 percent, FY27: 6.3 percent), S&P Global (FY26: 6.5 percent), United Nations (FY26: 6.3 percent, FY27: 6.4 percent), CII (FY26: 6.4-6.7 percent) and OECD (FY26: 6.7 percent), which all highlight robust domestic demand, expanding investments, and a stable external sector as key drivers.
Strong policy support, structural reforms, and a vibrant services sector further enhance the positive growth outlook. These projections reflect widespread confidence in India’s capability to maintain high growth amidst global challenges.
Point of View
I would emphasize that India's economic performance demonstrates a strong foundation built on consumer confidence, robust investments, and supportive government policies. It reflects a commitment to resilience, critical for navigating both domestic and global challenges.
NationPress
02/10/2025
Frequently Asked Questions
What is the GDP growth forecast for India in FY 2025-26?
The Central Bank has revised India's GDP growth forecast for FY 2025-26 upwards to 6.8 percent, compared to the earlier estimate of 6.5 percent.
What factors are contributing to India's economic resilience?
Key factors driving India's economic resilience include strong consumption, investments, government spending, good monsoon, and GST reforms.
How did the Reserve Bank of India respond to the current economic situation?
The Reserve Bank of India has kept the repo rate unchanged at 5.50 percent, reflecting a balanced approach to support economic momentum while ensuring financial stability.
