Indian economy outlook promising in 2025-26, supported by fiscal discipline and growing demand: RBI

New Delhi [India], May 29 (ANI): The Indian economy is expected to remain promising in 2025-26, supported by a range of positive indicators, according to the Reserve Bank of India (RBI) annual report 2024-25, released on Friday.

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In the report, the central bank highlighted that the economic outlook remains strong, driven by a revival in consumption demand, healthy balance sheets of banks and corporates, and easing financial conditions. These factors are likely to support growth momentum in the coming fiscal year.

RBI said, "The outlook for the Indian economy remains promising in 2025-26, supported by revival in consumption demand, government's continued thrust on capex while adhering to the path of fiscal consolidation."

The government's continued focus on capital expenditure, while maintaining fiscal discipline, has been a key pillar of this growth story.

The report also highlighted other contributors to the positive outlook, including the resilience of the services sector, growing consumer and business optimism, and overall sound macroeconomic fundamentals.

The central bank noted that the National Manufacturing Mission, announced in the Union Budget 2025-26, is expected to further strengthen the 'Make in India' initiative, boosting the manufacturing sector and creating employment opportunities.

RBI in the annual report also highlighted that India's engagement in global trade has also been growing.

"India's participation in 14 free trade agreements (FTAs) and six preferential trade agreements (PTAs), along with the new trade deals under negotiation with the US, Oman, Peru and the European Union (EU) may support growth in trade," the RBI said.

During 2024-25, the Indian economy remained resilient against the backdrop of steady global growth amidst multiple headwinds. This resilience was supported by robust macroeconomic fundamentals, proactive policy measures, and sustained government capital expenditure, which escalated post-parliamentary elections.

India's macroeconomic fundamentals, characterised by stable and moderate current account and fiscal deficits, also helped in ensuring an orderly evolution of the Indian rupee (INR).

The country is strategically focusing on building a strong artificial intelligence (AI) ecosystem to achieve self-reliance and drive innovation in this emerging sector.

India's leadership in digital payments continues, with the success of the Unified Payments Interface (UPI) placing the country at the forefront. India accounted for 48.5 per cent of global real-time payments by volume.

The RBI report further noted that Indian equity markets are expected to remain resilient amidst stable macroeconomic conditions and moderation in equity market valuations. However, it cautioned that geopolitical uncertainties could pose downside risks. (ANI)

(The story has come from a syndicated feed and has not been edited by the Tribune Staff.)