Overview

• Forecasters including S&P, ICRA and the RBI survey project FY26 GDP expansion of 6.2–6.5% anchored by solid domestic demand and accelerated government capex.
• Retail inflation eased to 2.1% in June, a 77-month low that gives the RBI scope to consider further repo rate cuts after a cumulative 100 basis-point reduction.
• An early, above-normal southwest monsoon boosted kharif sowing by about 10%, supporting agricultural output and rural consumption.
• Credit growth slowed to around 10% year-on-year, and private capital expenditure remains subdued, raising questions about investment-driven momentum.
• The Finance Ministry cautions that US tariff uncertainty, global economic slowdown and strategic shifts in semiconductor and rare earth supply chains could weigh on medium-term growth.