India’s real GDP growth forecast has been revised downwards to 6.5% for the current financial year 2025-26, from the earlier expectation of 6.7%, as highlighted by Reserve Bank of India (RBI) Governor Sanjay Malhotra during the policy announcement on Wednesday.

The Governor noted that this growth projection follows a strong performance of 9.2% recorded in the previous financial year, 2024-25, as per figures released by the Ministry of Statistics and Programme Implementation (MOSPI).

He said, “The real GDP, as you are all aware, is expected to grow at 6.5% this year, according to the MOSPI figures. This comes on top of the 9.2% growth rate observed in the previous year, 2024-2025.”

Speaking on the economic outlook, Malhotra mentioned that the agriculture sector is expected to perform well this year, due to healthy reservoir levels and strong crop production. He also highlighted that manufacturing activity is picking up pace, with business expectations remaining positive. Meanwhile, the services sector continues to show resilience, contributing steadily to economic growth.

He acknowledged that growth is improving after a weak performance in the first half of the previous financial year, although it still remains below the level the country aspires to achieve.

On the demand side, the Governor stated that the positive outlook for agriculture is likely to support rural demand, which remains strong. Urban consumption is also gradually increasing, aided by a rise in discretionary spending.

Investment activity has gained momentum, Malhotra added, and is expected to improve further. This improvement is driven by sustained higher-capacity utilization, continued government spending on infrastructure, strong balance sheets of banks and corporates, and easier financial conditions.

He said, “Investment activity has gained traction and is expected to improve further on the back of sustained higher-capacity utilization, the government’s continued focus on infrastructure spending, healthy balance sheets of banks and corporates, along with the easing of financial conditions.”

However, Malhotra cautioned that merchandise exports may face pressure due to global uncertainties. On the other hand, services exports are expected to stay resilient and support overall growth momentum.

(ANI)