While Domestic Economic Activity has shown resilience so far this year, The RBI, Under Governor Sanjay Malhotra, Cited Trade Policy Uncertain, GEOPOLITICAL TENSIONS, And Weather-RISKS Reasons for mainTaining the growth projection at the same level as announced in the first policy meeting of the fiscal year.
For Q1 FY26, The GDP Growth Forecast was maintained at 6.5%. The Projections for Q2, Q3, and Q4 of FY26 WERE WHEFT Unchanged at 6.7%, 6.6%, and 6.6%respectively.
According to RBI Governor Sanjay Malhotra, Industrial Activity is Recovering Gradually, Although the Pace Remains Somewhat Uneven. At the same time, the services sector is expected to maintain its Momentum Into May 2025.
On the demand front, Malhotra Noted that Private Consumption Continues to be the Mainstay of Aggregate Demand. It remains healthy, with a gradual risk in discretionary spending. Rural demand is steady, while urban demand is showing signs of improvement. Investment Activity is also Picking up, as reflected in High-Frequency indicators tracked by the Central Bank.
He added that Merchandise Exports Recorded Strong Growth in April 2025, Partly Due to Front-Loading of Shipments, What Services Exports Exports Continue to Follow a positive traffic. The Outlook for the Agriculture Sector and Rural Demand is expected to receive Further Support from the Forecast of Above-Normal Southwest Monsoon Rainfall.
Malhotra Emphahsized The Tentral Bank’s Continued Confidence in the Indian Economy, Supported by Improvements in High-Frequency Indicators and Sustained Momentum in the Services Sector, Whiche ISPECTORE Further Boost Urban Consumption.
However, he also highlighted ongoing trade policy unserties, which continue to weigh on merchandise expenses. The conclusion of a free trade agreement with the uk and the rapid program in negotiations with the us are expected to support trade going forward.
Despite these positive trends, Malhotra caumened that Downside Risks Persist Due to Geopolitical Tensions, Global Trade Disrupties, and Weather-Related Extricesrties. Taking all these facts into account, he said the rbi maintains a cautiously optimistic outlook for economic growth.
Discover more from gautamkalal.com
Subscribe to get the latest posts sent to your email.
Be First to Comment