There are immense possibilities for the Indian economy in 2025-26, RBI mentioned this in its annual report.

Reserve Bank of India: The Reserve Bank of India (RBI) gave some indications about its stance on interest rates through its annual report for 2024-25 a week before its next Monetary Policy Committee (MPC) meeting. Earlier, the central bank had cut interest rates. Now the new repo rate will be announced in the month of June and people are expecting a cut in it again.

In this report, there was a mention of reduction in inflation pressure. Especially in February and March 2025, there has been a sharp decline in food items. With this, the inflation rate is estimated to be 4 percent next year. In such a situation, if the conditions are favorable, then the policy can be relaxed. Based on the data available from the central bank, economic growth is being estimated despite global uncertainties.

Monetary policy should be growth supportive

The Reserve Bank said, in view of the fall in inflation and moderate growth, monetary policy should also be growth supportive. At the same time, one should also be cautious about the rapidly evolving global microeconomic conditions. GDP growth has been estimated to be 6.5 percent for FY 26. The six-member monetary policy committee of RBI has cut the policy repo rate by a total of 50 basis points since February.

Prospects promising for 2025-26

The report said, the prospects for the Indian economy remain promising in 2025-26, supported by strong macroeconomic fundamentals including improving consumption demand, the government's continued emphasis on capital expenditure while pursuing the path of fiscal consolidation, healthy balance sheets of banks and corporates, improving financial conditions, continued resilience of the services sector and strong consumer and business optimism. Along with this, the report also warned about uncertainty regarding global trade, geopolitical tensions and volatility in the global financial market.