RBI Forecasts 6.9% GDP Growth Amidst Global Uncertainties

The Reserve Bank of India's latest projection estimates the nation's GDP growth for the current financial year at 6.9%, revising it down from a prior forecast of 7.6% for 2025-26. This adjustment comes amidst persistent high commodity prices and supply chain disruptions stemming from the ongoing crisis in West Asia.

While the disruptions in key shipping routes pose a challenge, the services sector remains robust. Increased capacity utilization in manufacturing and healthy financial entities are expected to underpin domestic demand, according to RBI Governor Sanjay Malhotra. He noted that despite recent adversities, India's macroeconomic stability offers resilience against external shocks.

Governor Malhotra acknowledged the impact of high input costs and supply chain issues on growth but highlighted government initiatives aimed at supporting exports and maintaining supply chains. The RBI's Monetary Policy Committee expressed concerns over the inflation and growth risks due to prolonged conflicts. However, recent trade agreements may offer some relief to merchandise exports, complementing the resilience in services exports.