Current Affairs - Economy

$729.3 billion was the record level reached by India’s foreign exchange reserves in the week ended August 21. The reserves increased by $12.4 billion, surpassing the previous record of $728.5 billion recorded in February. The rise was supported by strong capital inflows following the RBI’s concessional swap window and revaluation gains. Foreign Currency Assets increased to $591.33 billion, while gold reserves rose to $114.22 billion. The RBI’s swap window had brought in around $72.8 billion by August 21. At the new record level, India’s forex reserves were sufficient to cover more than 11 months of goods imports.

India’s finished steel consumption increased by 7.9% during April-July 2026, reaching 56 million tonnes (MT), compared with 52 MT during the corresponding period of the previous year. The growth in consumption was higher than the 4.7% increase in finished steel production, which reached 54.7 MT. This stronger rise in consumption indicates robust domestic demand, particularly from infrastructure and construction-related industries. During the same period, India’s crude steel production also increased by 2.4% to 56.2 MT, reflecting continued growth in the country’s steel sector.

India’s unemployment rate for individuals aged 15 years and above declined to 5.1% in July 2026, compared with 5.5% in June 2026, according to the Periodic Labour Force Survey (PLFS) Monthly Bulletin released by the National Statistics Office (NSO). The decline was accompanied by improvements in labour market indicators. The overall Labour Force Participation Rate (LFPR) increased to 55.4%, while the Worker Population Ratio (WPR) rose to 52.5%. Rural unemployment also decreased to 4.5%. The survey used the Current Weekly Status (CWS) approach for estimating employment and unemployment conditions.

Ind-Ra has raised its forecast for India’s GDP growth in FY27 to 6.8%, up from its earlier estimate of 6.7%. The revision is mainly attributed to lower crude oil prices, with the agency reducing its baseline crude oil price assumption from $95 to $85 per barrel. However, Ind-Ra highlighted several risks, including El Niño conditions, high inflation, geopolitical tensions in West Asia, weak global trade, and unfavourable agricultural conditions. The projected growth remains below the 7.6% growth rate given in the provisional FY26 estimates by the National Statistical Office.

SBI Research projected India’s real GDP growth at 8% for the April-June quarter (Q1 FY27), exceeding the Reserve Bank of India’s projection of 7%. The forecast was based on a Nowcasting Model using 54 high-frequency indicators covering agriculture, industry, and services. Economic activity showed broad improvement, with 86% of 50 leading indicators recording growth. IIP growth accelerated to 7.3% in June, while services exports and airport cargo traffic also recorded strong growth. The report highlighted robust industrial activity, credit growth, and government capital expenditure as key factors supporting the growth outlook.