Current Affairs - Economy

S&P Global Ratings has revised India’s GDP growth forecast for FY26 to 6.5%, reflecting a strong vote of confidence in the country’s economic fundamentals. The upgraded forecast is supported by several favourable conditions, including the expectation of a normal monsoon, which is vital for agricultural productivity and rural demand. Additionally, lower global crude oil prices are expected to benefit India’s import-heavy energy sector by reducing costs and easing inflation. Anticipated monetary policy easing by the Reserve Bank of India, along with income tax concessions, are also projected to stimulate investment and consumption. Despite global uncertainties, India’s outlook remains robust.

India ranks 13th globally in online investment-related search interest, as per the BrokerChooser report. The ranking is based on monthly Google search volumes per capita and reflects a rising trend of digital investment curiosity in India, especially among younger demographics. With 2,629 monthly searches per million people, India shows a growing appetite for financial literacy and wealth creation through digital platforms. Stock-related queries top the list, followed by forex and cryptocurrency. Despite traditional preferences for gold and real estate, modern investment channels—bolstered by fintech apps and financial influencers—are shaping the country’s evolving investment behaviour and curiosity landscape.

India’s core sector growth slowed significantly to 0.7% in May 2025, representing the weakest expansion in the last nine months. This decline was driven by contractions in critical sectors such as crude oil, natural gas, fertilisers, and electricity. The Index of Eight Core Industries (ICI), which tracks these sectors and contributes about 40% to the broader Index of Industrial Production (IIP), serves as a vital gauge of economic momentum. The sharp deceleration follows a prior month of sluggish performance, highlighting underlying stress in industrial output. This downtrend could impact overall GDP growth and signal a need for policy attention.

According to the Reserve Bank of India, India’s House Price Index (HPI) increased by 3.1% year-on-year in the fourth quarter (January–March) of FY2024–25. This moderate growth highlights a steady recovery in the country’s urban housing markets, with continued resilience in demand. The data, gathered from property registration authorities across ten major cities, is a reliable indicator of real estate price trends. While Kolkata led with an 8.8% rise and Kochi saw a 2.3% decline, the national average points to balanced and sustained momentum. The 3.1% annual increase is slightly lower than the 4.1% growth seen during the same period the previous year.

ICRA has forecasted India’s GDP growth for FY2025–26 at 6.2%, indicating a slight moderation from the 6.5% growth recorded in the previous fiscal year. The dip is attributed primarily to weaker global trade conditions and a slowdown in merchandise exports. Despite these external challenges, strong rural demand, higher capital expenditure by the government, and fiscal support measures are expected to maintain economic momentum. The projection plays a crucial role in shaping fiscal policy, investment strategies, and economic planning for the year, as it reflects the balancing act between global headwinds and domestic resilience.