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Reserve Bank of India reports resilient growth with 8.2 percent GDP in Q2 FY25, driven by private consumption, strong services, and moderated inflation despite global uncertainty.
Macroeconomic stability, reforms key to sustaining India’s growth momentum: RBI
Sustained focus on macroeconomic stability, structural reforms and productivity-enhancing measures will be crucial for India to remain on a high-growth path as the global economic environment continues to change rapidly, the Reserve Bank of India said in its December 2025 State of the Economy assessment.
Despite global uncertainty, the Indian economy has remained resilient and strong, supported by domestic demand and subdued inflation, according to the Central bank.
The article said that India’s GDP growth remained fastest in six quarters with 8.2 per cent in Q2 FY25. The services sector of India remained strong, while manufacturing showed mild slowdown, it added.
The Reserve Bank of India said the pickup in growth was largely driven by private consumption and fixed investment, even as global trade and policy uncertainties persisted.
On the demand side, urban consumption strengthened further, aided by higher passenger vehicle sales, strong air passenger traffic and improved supply conditions. Rural demand also showed signs of recovery, supported by a favourable rabi crop outlook, higher tractor sales and easing inflationary pressures. Digital payments and GST e-way bill generation recorded healthy growth, indicating sustained momentum in goods movement and economic transactions.
From a policy standpoint, the RBI’s Monetary Policy Committee (MPC) cut the repo rate by 25 basis points to 5.25 percent in its December review while maintaining a neutral stance. The central bank noted that a benign outlook for headline and core inflation provided space to support growth without compromising price stability.
India’s external sector also showed resilience. The merchandise trade deficit narrowed in November, helped by a sharp rise in exports and a contraction in imports, particularly gold. The current account deficit moderated in Q2 FY26 compared to a year ago, supported by strong services exports and steady remittance inflows, even as global portfolio flows to emerging markets turned volatile.
Globally, uncertainty eased somewhat in November, though financial markets remained volatile due to valuation concerns and diverging monetary policy signals from major central banks.
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December 23, 2025, 17:51 IST
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