New Delhi, Dec 19 (SocialNews.XYZ) High-frequency indicators suggest that domestic economic activity is holding up in Q3 FY26, although there are some emerging signs of weakness in a few leading indicators, the Reserve Bank of India (RBI) said on Friday.
In the monetary policy committee (MPC) minutes, the Central Bank said that GST rationalisation and festival-related spending supported domestic demand during October-November.
“Rural demand continues to be robust while urban demand is recovering steadily. Investment activity remains healthy with private investment gaining steam on the back of expansion in non-food bank credit and high-capacity utilisation,” said the RBI.
On the supply side, agricultural growth is supported by healthy kharif crop production, higher reservoir levels and better rabi crop sowing. Manufacturing activity continues to improve, and the services sector is maintaining a steady pace.
“Looking ahead, domestic factors such as healthy agricultural prospects, continued impact of GST rationalisation, benign inflation, healthy balance sheets of corporates and financial institutions and congenial monetary and financial conditions should continue to support economic activity. Continuing reform initiatives would further facilitate growth,” according to the MPC minutes.
On the external front, services exports are likely to remain strong, while merchandise exports face some headwinds.
“External uncertainties continue to pose downside risks to the outlook, while speedy conclusion of ongoing trade and investment negotiations present upside potential. Taking all these factors into consideration, real GDP growth for 2025-26 is projected at 7.3 per cent,” said the Reserve Bank.
The next meeting of the MPC is scheduled during February 4-6, 2026.
In India, real gross domestic product (GDP) registered a six-quarter high growth of 8.2 per cent in Q2 FY26, underpinned by resilient domestic demand amid global trade and policy uncertainties.
Economic activity during the first half of the financial year benefited from income tax and goods and services tax (GST) rationalisation, softer crude oil prices, front-loading of government capital expenditure, and facilitative monetary and financial conditions supported by benign inflation.
Source: IANS
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