RBI retails GDP forecast for FY26 at 6.5%, says Indian economy shows strength, stability and opportunity

The Reserve Bank of India (RBI) on Friday retained its GDP growth projections for the current fiscal year (2025-26) at 6.5%, saying that the Indian economy is depicting strength, stability and opportunity during a time of global uncertainty. The growth projections for FY26 are compared with the 6.5% economic growth recorded in the 2024-25 fiscal year.

The central bank has projected a growth rate of 6.5% for the first quarter of FY26 (April-June) and 6.7% for the second quarter (July-September). For the third (October-December) and fourth (January-March) quarters, the apex bank has projected economic growth at 6.6% and 6.3%, respectively.

[RBI’s Monetary Policy Committee](RBI slashes repo rate by 50 bps: Full text of Governor Sanjay Malhotra’s June 2025 MPC speech ) (MPC) on Friday cut the key interest rate (repo rate) by 50 basis points to 5.5%, saying that the frontloading rate cuts would support economic growth.

"As the global environment remains uncertain, it has become even more important to focus on domestic growth amidst sustained price stability. Accordingly, today’s monetary policy actions should be seen as a step towards propelling growth to a higher aspirational trajectory," RBI Governor Sanjay Malhotra said.

In the bi-monthly monetary policy, Malhotra said that amidst heightened volatility in capital flows and exchange rates, central banks of emerging market economies have a tougher task to stabilise their economies against global spillovers.

"In this global milieu, the Indian economy presents a picture of strength, stability, and opportunity. This matrix of fundamentals provides the necessary core strength to cushion the Indian economy against global spillovers and propel it to grow at a faster pace," he said.

Elaborating, Malhotra said the strength comes from the strong balance sheets. Besides, there is stability on all three fronts—price, financial, and political—providing policy and economic certainty in this dynamically evolving global economic order. Thirdly, the Indian economy offers immense opportunities to investors through 3Ds—demography, digitalisation and domestic demand.

The RBI Governor said India's growth remains lower than aspirations amidst a challenging global environment and heightened uncertainty. Thus, it is imperative to continue to stimulate domestic private consumption and investment through policy levers to step up the growth momentum.

"This changed growth-inflation dynamics calls for not only continuing with the policy easing but also frontloading the rate cuts to support growth," Malhotra said.

Going forward, the outlook for the agriculture sector and rural demand is expected to receive further impetus from the expected above-normal southwest monsoon rainfall, he added.