RBI highlights India's economic resillience, says growth driven by strong domestic demand

Reserve Bank of India (RBI) stated in a latest monthly update that the second advance estimates of GDP for 2025-26, with the new base year 2022-23, indicate sustained resilience in the Indian economy. The growth was driven by strong domestic demand, with private final consumption expenditure and investment activity remaining robust. The quarterly growth also remained high at 7.8 per cent in Q3:2025-26. High frequency indicators signal towards economic activity gaining momentum in February. Both urban and rural markets supported strong demand, aided by lower income tax and GST rates, cash flows from the kharif harvest, and the wedding season. Retail sales of two-wheelers, passenger vehicles, and tractors reached their highest-ever levels for February. Agriculture remained on a strong footing, with the second advance estimates placing foodgrain production at a record level in 2025-26. Industrial activity continued to register robust growth and the services sector demonstrated resilience. Corporate sector performance also improved with listed private non-financial companies reporting stronger operating profit growth in Q3:2025-26, driven particularly by manufacturing and information technology firms.

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