The Reserve Bank of India (RBI) has revised India’s GDP growth forecast for the financial year 2025-26 to 6.5%, down from the earlier estimate of 6.7%. RBI Governor Sanjay Malhotra made the announcement on April 9, during the central bank’s Monetary Policy Committee (MPC) meeting.
This decision comes alongside a 25 basis points cut in the repo rate, bringing it down to 6%. The rate cut is expected to boost demand and investment in the economy, especially at a time when global uncertainty is rising due to trade tensions.
The revised quarterly GDP forecasts for FY26 are:
- Q1: 6.5% (earlier 6.7%)
- Q2: 6.7% (earlier 7%)
- Q3: 6.6% (up from 6.5%)
- Q4: 6.3% (down from 6.5%)
The RBI further informed that latest tariff declarations made by US President Donald Trump have imposed additional stress on the global economy, casting uncertainty over global trade. Governor Malhotra cautioned that such trade tensions would lead to decreased export earnings for India as well as decelerated growth in the country.
But he did indicate some pluses too. Agriculture is looking bright because of healthy water reservoir levels and robust crop production. An expected fall in crude and commodities due to global slowdown may help India’s economy as well.
In February, RBI had reduced rates by 25 basis points and had envisaged growth for FY26 at 6.7%, but growing global risk has resulted in a changed perception now.
Do you have a news tip for Lakshmishree reporters? Please email us at media@lakshmishree.com.
Source: Moneycontrol.
News Desk
