High frequency indicators suggest that economic activity is holding momentum in Q2, says RBI Governor

RBI Governor?s Sanjay Malhotra stated today that domestic economic activity exhibited resilience amidst global headwinds as evident from real GDP growth of 7.8 per cent in Q1:2026-27. Growth was driven by resilient private consumption and strong investment activity while contribution of net exports also remained positive. High frequency indicators available so far suggest that economic activity is holding momentum in Q2, albeit with some moderation compared to the preceding quarter. Despite deficient and uneven southwest monsoon, kharif sowing, although somewhat above its normal level, has been marginally lower than last year. Manufacturing activity, despite cost pressures, is holding well, as indicated by IIP and PMI. Services sector activity remained steady and broad-based, owing to buoyant domestic and external demand. He noted that while global factors are weighing on the domestic growth-inflation outlook adversely, the inherent resilience and strength of the Indian economy are helping navigate through these challenging times. RBI shall implement policies that further add to this resilience. Accordingly, we shall strive for price and financial stability as both are essential for sustainable growth in the long run, he opined.

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