Overview
- Real GDP expanded 6.5% in FY2024–25 and 7.8% in Q2 FY2025–26, with growth projected at 6.6% in FY2025–26 and 6.2% in FY2026–27.
- Headline inflation eased to 1.5% in September 2025 while core inflation rose to 4.6%, and unemployment stayed low at 5.2%.
- External metrics remained stable with a current account deficit of 0.6% of GDP in FY2024–25 and foreign exchange reserves at $695 billion in October.
- The IMF credits a decade of reforms—including GST simplification, inflation targeting, and digital public infrastructure—for resilience and a drop in extreme poverty to 5.3%.
- Policy advice calls for targeted, time‑bound fiscal support if tariffs persist, calibrated medium‑term consolidation with stronger revenues, data‑driven monetary policy with room to ease, and exchange‑rate flexibility.