Real GDP growth estimate cut by 20 basis points to 6.5% for FY25

Sanjay Malhotra, Governor, Reserve Bank of India stated today in his statement following the monetary policy decision that Real GDP for India is estimated to grow at 6.5 per cent in 2024-25 on top of a 9.2 per cent growth rate observed in the previous year. In 2025-26, prospects of agriculture sector remain bright on the back of healthy reservoir levels and robust crop production. Manufacturing activity is showing signs of revival with business expectations remaining robust, while services sector activity continues to be resilient.

He noted that bright prospects of the agriculture sector bode well for rural demand which continues to be healthy, while urban consumption is gradually picking up with an uptick in discretionary spending. 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. 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.

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. The growth projection for the current year has been marked down by 20 basis points relative to RBI's earlier assessment of 6.7 per cent in the February policy.

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