TV
The Reserve Bank of India on Wednesday lowered the country's GDP growth forecast for the current financial year to 6.5 per cent from the earlier estimate of 6.7 per cent, citing global trade disruptions and ongoing policy uncertainties.
Presenting the outcome of the first bi-monthly Monetary Policy Committee (MPC) meeting for 2025-26, RBI Governor Sanjay Malhotra said the outlook for the agriculture sector remains positive, supported by strong reservoir levels and healthy crop output projections.
He also noted that the manufacturing sector is beginning to show signs of recovery, with business sentiment holding firm, and the services sector continues to display resilience.
Investment Outlook Positive
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.
GDP Growth Projections by Quarter
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.
Trade and Policy Headwinds Weigh on Forecast
This downward revision essentially reflects the impact of global trade and policy uncertainties, he said.
(With PTI Inputs)
