India will remain world’s fastest growing economy in 2025-26: RBI
New Delhi:
According to the latest monthly bulletin of the Reserve Bank of India (RBI), India will remain the world’s fastest growing major economy in 2025-26. The report states that the High-Frequency Indicator shows that in the second half of 2024-25, India’s economic activity is being seen fast and this pace is likely to continue.
GDP growth estimate and budget impact
Despite the global challenges, India’s GDP growth is expected to remain stable. The IMF and the World Bank (World Bank) have estimated India to be 6.5% and 6.7% respectively.
The government has also focused on the Capital Expenditor along with increasing domestic income and consumption in the Union Budget 2025-26. The budget targets to increase capital expenditure/GDP ratio from 4.1% to 4.3%.
Retail inflation and demand improvement
Retail inflation has come down to 4.3% in January, which is the lowest level of the last five months. The reason for this is the fall in vegetable prices. The fall in the prices of all the prices has played an important role in this. Rural and urban demands have been seen to improve. Demand has seen a boom due to increasing agricultural income in rural areas. Rural sales of FMCG companies recorded an increase of 9.9% in the third quarter, which is more than 5.7% of the previous quarter. While urban demand increased by 5%
Increase in industrial activities and investment
According to the Perchasing Manager Index (PMI), Industrial Activities have improved. Tractor sales, fuel consumption and number of air travelers are increasing, which indicates a strong economy.
Private investment and market fluctuations
According to the report, private investment remains stable and the cost of projects approved by banks and financial institutions in the third quarter of the current financial year stood at around Rs 1 lakh crore.
Due to the uncertainty of Global Trade and Geopolitical Scenario, the selling of foreign portfolio investors (FPI) was seen, which affected the Indian market. Foreign portfolio investors (FPI) sales pressure and strong US dollars declined the stock markets. The rupee recorded weakness due to strength of US dollar. Due to which Indian Rupee has also weakened like other emerging economies.
