A new Crisil report projects India’s GDP growth to remain steady at 6.5 percent in FY26. This stability comes despite some downside risks from external factors. The forecast highlights resilience in the economy.
Export growth is expected to be a drag due to US tariffs. However, domestic consumption will receive significant support. Rate cuts, healthy rains, and soft inflation are key drivers.
Repo rate cuts and a planned CRR reduction will cushion financial conditions. These measures are slated for implementation between September and December. They aim to bolster economic activity.
Global turmoil may cause volatility in capital flows. This could keep the rupee under pressure in the short term. External factors remain a watchpoint.
The RBI MPC is expected to cut policy rates once more this fiscal. Soft inflation and growth risks justify this move. Monetary policy continues to be accommodative.
Inflation has stayed below the RBI’s 4 percent target for six months. This trend from February to July is encouraging. It supports the case for further easing.
Healthy agricultural production is keeping food inflation subdued. Kharif sowing was up 2.9 percent year on year as of August 29. Favorable monsoons play a crucial role.
Excess rain might pressure some crop yields. Nonetheless, soft commodity prices will help. Non food inflation is expected to remain low.
Lower GST rates are likely to add downside to inflation. This fiscal could see continued price stability. Policy measures are aligning well.
Bank credit growth rose to 10 percent year on year in August. It was 9.8 percent in July and 9.6 percent in the June quarter. Lending activity is picking up pace.
Sectoral data until July shows improved credit in services. Agriculture and industry also saw gains. This indicates broad based economic improvement.
Growth in personal loans remained broadly stable. It was 11.9 percent in July versus 12.1 percent in June. Consumer borrowing trends are consistent.
The one year MCLR eased 15 bps to 8.6 percent. This reflects the lagged response to RBI rate cuts. Borrowing costs are gradually declining.
Overall, the economy shows promising signs. Steady growth is supported by multiple factors. India’s economic trajectory looks positive.