The Indian economy is expected to maintain a promising outlook in 2025-26, supported by several positive factors, according to the Reserve Bank of India’s (RBI) annual report for 2024-25, released on Friday.The report emphasized that economic growth momentum is likely to continue, driven by a revival in consumption demand, healthy balance sheets among banks and corporates, and easing financial conditions.“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.” RBI said, as quoted ANI. The government’s sustained focus on capital expenditure, alongside fiscal discipline, remains a cornerstone of the growth story.Additional contributors to the positive outlook include the resilience of the services sector, growing consumer and business confidence, and solid macroeconomic fundamentals.Also Read: Currency printing cost rises 25% to Rs 6,372.8 crore in FY25: RBIThe central bank also highlighted the National Manufacturing Mission, announced in the Union Budget 2025-26, which is expected to further bolster the ‘Make in India’ initiative, strengthening the manufacturing sector and generating employment.RBI noted India’s expanding role in global trade, with participation in 14 free trade agreements (FTAs) and six preferential trade agreements (PTAs), plus ongoing trade negotiations with the US, Oman, Peru, and the European Union (EU), all expected to support trade growth.During 2024-25, India’s economy demonstrated resilience amid steady global growth and multiple headwinds, underpinned by robust macroeconomic fundamentals, proactive policies, and sustained government capital expenditure that accelerated following parliamentary elections.Stable and moderate current account and fiscal deficits helped ensure an orderly evolution of the Indian rupee (INR), the report said.The country is also focusing strategically on building a strong artificial intelligence (AI) ecosystem to drive innovation and achieve self-reliance.India’s leadership in digital payments continues, with the Unified Payments Interface (UPI) accounting for 48.5 percent of global real-time payments by volume.The RBI report further observed that Indian equity markets are expected to remain resilient amid stable macroeconomic conditions and moderated market valuations but cautioned that geopolitical uncertainties could pose downside risks.
