Indian economy expected to grow 6.3-6.8% in FY26: Economic Survey

India’s economy is expected to grow between 6.3% and 6.8% in FY26, per the Economic Survey tabled in Parliament by Union Minister for Finance and Corporate Affairs, Ms. Nirmala Sitharaman, on January 26, 2025. This aligns with growth forecasts by international bodies such as the International Monetary Fund (IMF), Asian Development Bank (ADB), and World Bank. The IMF has kept India’s GDP growth projection at 6.5% for FY25 and FY26, while the World Bank anticipates a 6.7% growth. The ADB revised India’s GDP forecast for FY25 to 6.5% from 7%; for FY26, it revised the projection to 7% from 7.2%. These adjustments reflect weaker-than-expected growth in Q2 FY25, primarily due to manufacturing and government spending slowdowns. 

This revision indicates a slowdown in growth compared to earlier estimates. Contributing factors include sluggish manufacturing activity and reduced government expenditure. The revised outlook contrasts with the previous projections of 6.5% to 7% growth for FY25 in last year’s Economic Survey. The Reserve Bank of India (RBI) had also forecasted a growth of 6.6% for the same period. Meanwhile, the first advance estimate by the government forecasts a 6.4% GDP growth for FY25. Inflation remains a persistent concern, staying above the RBI’s medium-term target of 4% for most of the past year. In December 2024, India’s retail inflation, measured by the Consumer Price Index (CPI), was 5.22%, slightly lower than November’s 5.48%. The Union Budget for 2025-26 is set to be presented on February 1. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.