India’s economic growth strong despite global worries

India’s economic growth strong despite global worries

A healthy monsoon, 15% above average by July 9, boosts farming. Government finances remain stable; fiscal deficit fell to 4.5% in May 2025
Published on

New Delhi

India’s economic growth is staying strong even with global uncertainties, according to a new report from Bank of Baroda released on Friday. The report says that in the first quarter of FY26, there is improvement in services and manufacturing, and people are spending more compared to the last quarter of FY25.

The report points to rising steel consumption, more electronic imports, and higher central government spending as signs of stronger demand. In the services sector, there is more activity shown by higher services PMI, more vehicle registrations, increased diesel use, better state revenue, and more e-way bills.

However, there are some challenges. Sales of two-wheelers have slowed, and production of consumer durables and fast-moving consumer goods (FMCG) has moderated. Still, inflation is low, which could lead to softer monetary policies that encourage growth.

A healthy monsoon, 15% above average as of July 9, is expected to boost farming. The report also highlights that government finances are stable, with the fiscal deficit down to 4.5% in May 2025 from 4.6% in April.

The rupee’s outlook is also positive. It weakened only slightly by 0.2% in June after a bigger fall in May. Easing global tensions and a weaker dollar helped keep the rupee stable. In July, the rupee has started to appreciate, with hopes high for an India-US trade deal by August 1.

Globally, worries about new tariffs are raising inflation fears, which may slow policy easing. Despite this, India’s economy is expected to remain strong, although markets might see some ups and downs.

logo
IBC World News
ibcworldnews.com