RBI retains FY26 GDP forecast at 6.5 per cent; says Indian economy shows strength, stability, opportunity

The FY26 growth projections are compared with the 6.5 per cent economic growth recorded in the 2024-25 fiscal year. The Reserve Bank of India (RBI) has projected economic growth at 6.5 per cent for the June quarter and 6.7 per cent for the September quarter

Mumbai: Reserve Bank on Friday retained GDP growth projections for the current fiscal at 6.5 per cent, saying the Indian economy presents a picture of strength, stability and opportunity in the backdrop of global uncertainty.

The FY26 growth projections are compared with the 6.5 per cent economic growth recorded in the 2024-25 fiscal year. The Reserve Bank of India (RBI) has projected economic growth at 6.5 per cent for the June quarter and 6.7 per cent for the September quarter. For the December and March quarters of FY26, GDP growth is estimated at 6.6 per cent and 6.3 per cent, respectively.

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The Monetary Policy Committee (MPC) on Friday cut the benchmark policy rate by 50 basis points to 5.5 per cent and said frontloading rate cuts would support economic growth.

“As global environment remains uncertain, it has become even more important to focus on domestic growth amidst sustained price stability. Accordingly, today’s monetary policy actions should be seen as a step towards propelling growth to a higher aspirational trajectory,” RBI Governor Sanjay Malhotra said.

In the bi-monthly monetary policy, Malhotra said that amidst heightened volatility in capital flows and exchange rates, central banks of emerging market economies have a tougher task to stabilise their economies against global spillovers.

“In this global milieu, the Indian economy presents a picture of strength, stability, and opportunity… This matrix of fundamentals provides the necessary core strength to cushion the Indian economy against global spillovers and propel it to grow at a faster pace,” he said.

Elaborating, Malhotra said the strength comes from the strong balance sheets. Besides, there is stability on all three fronts – price, financial, and political – providing policy and economic certainty in this dynamically evolving global economic order.

Thirdly, the Indian economy offers immense opportunities to investors through 3Ds – demography, digitalisation and domestic demand. The RBI Governor said India’s growth remains lower than aspirations amidst a challenging global environment and heightened uncertainty.

Thus, it is imperative to continue to stimulate domestic private consumption and investment through policy levers to step up the growth momentum. “This changed growth-inflation dynamics calls for not only continuing with the policy easing but also frontloading the rate cuts to support growth,” Malhotra said.

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, he added.