By Global Consultants Review Team
India’s economy has entered Q2 of FY26 on a strong footing, supported by resilient domestic demand, controlled inflation, and a favourable monsoon, according to the Finance Ministry’s Monthly Economic Review for June 2025. The report describes the current fiscal outlook as “steady as she goes,” highlighting stable macroeconomic fundamentals.
GDP growth for FY26 is projected between 6.2 percent and 6.5 percent by major forecasters including S&P, ICRA, and the RBI’s Survey of Professional Forecasters. Financial markets remain robust, driven by strong domestic investor participation and a healthy banking sector. Gross and net NPAs for scheduled commercial banks have dropped to multi-decade lows of 2.3 percent and 0.5 percent respectively.
Agriculture has gained momentum due to early and above-normal rainfall from the southwest monsoon. Fertiliser availability and reservoir levels are adequate, improving rural sentiment. A NABARD survey shows 74.7 percent of rural households expect income growth, the highest since the survey began.
Q1 FY26 economic activity was led by strong services and encouraging trends in manufacturing and agriculture. However, external risks persist. The U.S. economy contracted by 0.5 percent in Q1 2025, and uncertainty around global trade policies could weigh on Indian exports. Slow credit offtake and tepid private investment may also limit growth acceleration.
Despite global headwinds, the ministry remains cautiously optimistic, citing India’s strong fundamentals and the need to address medium-term challenges such as supply chain diversification in semiconductors and rare earth materials.
We use cookies to ensure you get the best experience on our website. Read more...
