RBI MPC 2025: Growth Estimate For FY26 Lowered To 6.5 Per Cent, Governor Says Trade Disruptions Risk To Economy

RBI MPC April 2025: The Reserve Bank of India (RBI) on Wednesday announced a 25 basis points reduction in the repo rate, bringing the benchmark down to 6 per cent. 

Additionally, Governor Sanjay Malhotra pointed out that the global economic environment remained challenging and rapidly evolving. Sharing an outlook for the fiscal year 2025-26 (FY26), the committee projected the economy to clock a GDP growth rate of 6.5 per cent, revising its earlier projections downward by 20 basis points. Notably, in its February meet, the MPC estimated the economy to grow at 6.7 per cent in FY26. The committee attributed this to the uncertainties prevalent in global trade relations.

Elaborating on the real GDP estimates for the fiscal year, the governor said that the growth rate for the April-June 2025 quarter is predicted to be at 6.5 per cent, while the estimates for the July-September, October-December, and January-March quarters stands at 6.7 per cent, 6.6 per cent, and 6.3 per cent respectively. 

“While the risks are evenly balanced around these baseline projections, uncertainties remain high in the wake of the recent spike in global volatility,” Malhotra added.

The global economic environment is facing rising volatility, shaped largely by recent tariff actions that have intensified the cloud of unpredictability hanging over global growth and inflation, the governor noted.

 As these challenges unfold, financial markets are reacting sharply—equity indices have seen corrections, oil prices have tumbled to their lowest in over three years, the US dollar has softened, and bond yields have declined considerably. Amid this backdrop, central banks are proceeding cautiously, and policy responses are diverging across economies as they respond to their respective domestic mandates, he explained.

Also Read : RBI’s Second Consecutive Rate Cut Is Timely And Encouraging, Says Industry Experts

Indian Economy Going Forward

Explaining the outlook for the Indian economy ahead, the official said India's agriculture sector remains promised, backed by high reservoir levels and strong crop yields. At the same time, discretionary spending continued to rise in urban areas, signaling a gradual recovery in consumption.

Investment momentum is also building, he noted. Factors such as improved capacity utilisation, strong bank and corporate balance sheets, and the government’s continued focus on infrastructure are all contributing to a more favourable investment climate. With financial conditions easing, these trends are expected to sustain. Although global trade headwinds may continue to weigh on merchandise exports, services exports are projected to remain stable, the governor added. Nevertheless, risks stemming from global trade disruptions remain a persistent concern for India’s economic trajectory, he cautioned.

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