ICRA Projects India’s FY26 GDP Growth at 6.2%, Below RBI Estimate.
Economy Business
In June 2025, the Gurugram-based Investment Information and Credit Rating Agency (ICRA) retained India’s Gross Domestic Product (GDP) growth forecast for the Financial Year (FY) 2025–26 at 6.2%. This projection was published in ICRA's June Macroeconomic Update and is slightly lower than the Reserve Bank of India’s (RBI) forecast of 6.5%.
- ICRA has estimated that retail inflation will remain moderate in FY26. The Consumer Price Index (CPI) inflation is projected to be 3.5%, significantly lower than the 4.6% recorded in FY25 and also below the Monetary Policy Committee’s (MPC) forecast of 3.7%. This could provide room for policy stability.
- The agency noted that the early onset of the monsoon in May 2025 disrupted electricity and mining activities. However, ICRA expects a robust summer crop season, with Agricultural Gross Value Added (GVA) estimated to grow by 4.5% in Q1 of FY26. For the full year, GVA in the farm sector is projected to grow between 3.5% and 4.0%, assuming normal monsoon patterns.
Main Point :- (i) The report also highlights a mixed economic trend in the first quarter (April–June 2025) of FY26. Out of 17 key non-agricultural high-frequency indicators monitored by ICRA, only nine showed improvement compared to Q4 of FY25 (January–March 2025), suggesting patchy recovery in industrial and services sectors.
(ii) ICRA flagged multiple external macroeconomic challenges such as global geopolitical tensions, especially in West Asia, uncertainty around global interest rate cycles, and volatility in financial markets. These could weigh heavily on India’s growth trajectory and pose downside risks to the overall economic outlook for FY26.
(iii) This GDP forecast comes in the backdrop of mixed signals from both rural and urban demand, monetary policy constraints, and high base effects from the previous year. Despite this, ICRA maintains cautious optimism about India’s medium-term recovery supported by stable inflation and favourable policy frameworks.
About ICRA Limited
MD & CEO : Ramnath Krishnan
Founded: 1991
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