RBI MPC 2025: Panel Cuts Growth Forecast For FY25 To 6.4%, Check GDP Estimates For FY26 Here

Governor Sanjay Malhotra said that industrial growth remained weak, meanwhile services sector and a recovery in agriculture supported advancement on the supply side.

Sharing an outlook for the upcoming fiscal year 2025-26 (FY26), the committee projected the economy to clock a GDP growth rate of 6.7 per cent

Source : ABPLIVE AI

RBI MPC 2025: The Reserve Bank of India (RBI) on Friday revised its growth forecast for the current 2024-25 fiscal year (FY25), slashing it to 6.4 per cent, from the earlier projection of 6.6 per cent. 

The Monetary Policy Committee (MPC) in its last meeting in the current financial year projected that the real gross domestic product (GDP) according to the First Advance Estimates (FAE) is estimated to grow at 6.4 per cent in FY25, on a year-on-year (YoY) basis. This growth projection was backed by a recovery in private consumption.

Further, the MPC unanimously decided to slash the key rates by 25 basis points, cutting the repo rate from 6.5 per cent to 6.25 per cent. The committee also adopted a neutral stance on the monetary policy.

Explaining the economy’s performance, Governor Sanjay Malhotra said that industrial growth remained weak, meanwhile services sector and a recovery in agriculture supported advancement on the supply side.

GDP Projections In FY26

Sharing an outlook for the upcoming fiscal year 2025-26 (FY26), the committee projected the economy to clock a GDP growth rate of 6.7 per cent. “Looking ahead, healthy rabi prospects and an expected recovery in industrial activity should support economic growth in 2025-26. Among the key drivers on the demand side, household consumption is expected to remain robust aided by the tax relief in the Union Budget 2025-26. Fixed investment is expected to recover, supported by higher capacity utilisation levels, healthy balance sheets of financial institutions and corporates, and Government’s continued emphasis on capital expenditure,” the governor added.

The real GDP growth rate for the first quarter (April-June) is estimated at 6.7 per cent, while the projection for Q2 (July-September), Q3 (October-December), and Q4 (January-March) stands at 7 per cent, 6.5 per cent, and 6.5 per cent respectively in the upcoming fiscal year.

The major challenges to economic growth going forward included headwinds from geopolitical conflicts, nationalist trade policies, fluctuations in global commodity prices, and uncertainties in the financial market, the governor pointed out.