Indian economy remains resilient, consumer sentiments show improved optimism

Reserve Bank of India (RBI) stated in its latest monthly update that the Indian economy remained resilient amidst global uncertainties. Timely progress of southwest monsoon has helped increase kharif sowing. Growth in industrial sector remained uneven across segments in June, pulled down by electricity and mining. Manufacturing and services continued to expand in July. Forward-looking surveys of consumer sentiments show improvement in consumer confidence for the current period and improved optimism about the future. Headline inflation, driven by benign food prices and favourable base effects, is likely to soften further and remain below the 4 per cent target in Q2. In this context, the monetary policy committee unanimously voted to keep the repo rate unchanged at 5.5 per cent in its resolution of August 6, 2025, considering the current macroeconomic conditions, outlook and uncertainties, as well as the ongoing transmission of the cumulative 100 bps rate cut undertaken since February 2025.

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