RBI Lowers GDP Growth Projection To 6.5% For FY26

(MENAFN- Kashmir Observer) Mumbai- Reserve Bank on Wednesday cut India's growth forecast to 6.5 per cent from 6.7 per cent estimated earlier for the current financial year on account of impact of global trade and policy uncertainties.

Prospects of agriculture sector remain bright on the back of healthy reservoir levels and robust crop production in 2025-26, RBI Governor Sanjay Malhotra said while unveiling the outcome of the first bi-monthly Monetary Policy Committee meeting for the current financial year.

Manufacturing activity is showing signs of revival with business expectations remaining robust, while services sector activity continues to be resilient, he said.

Investment activity has gained traction and it is expected to improve further on the back of sustained higher capacity utilisation, government's continued thrust on infrastructure spending, healthy balance sheets of banks and corporates, along with the easing of financial conditions, he said.

“Merchandise exports will be weighed down by global uncertainties, while services exports are expected to remain resilient. Headwinds from global trade disruptions continue to pose downward risks,” he said.

Read Also RBI Allows Banks To Hike ATM Charges To Rs 23/Withdrawal Beyond Free Monthly Usage From May 1 RBI Mandates Banks To Conduct Special Clearing Operations On Monday

Taking all these factors into consideration, he said, real GDP growth for 2025-26 is now projected at 6.5 per cent, with Q1 at 6.5 per cent; Q2 at 6.7 per cent; Q3 at 6.6 per cent; and Q4 at 6.3 per cent.

“While the risks are evenly balanced around these baseline projections, uncertainties remain high in the wake of the recent spike in global volatility. It may be noted that the growth projection for the current year has been marked down by 20 basis points relative to our earlier assessment of 6.7 per cent in the February policy,” he said.

This downward revision essentially reflects the impact of global trade and policy uncertainties, he said.

Follow this link to join our WhatsApp group : Join Now

Be Part of Quality Journalism

Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast.

ACT NOW

MONTHLY	Rs 100
YEARLY	Rs 1000
LIFETIME	Rs 10000

CLICK FOR DETAILS

MENAFN09042025000215011059ID1109407290