The Reserve Bank of India (RBI), in its latest monthly bulletin released on June 25, 2025, has reaffirmed the resilience of the Indian economy despite ongoing global uncertainties. The central bank pointed to robust growth in the industrial and services sectors and a broad-based agricultural recovery as key signs of economic health.
According to the bulletin, India’s economy expanded by 7.4% year-on-year in the first quarter of 2025, making it the fastest-growing among major global economies. The RBI maintained a growth forecast of 6.5% for the full fiscal year, with an optimistic goal of achieving 7–8% growth under favorable conditions.
The report also noted a significant decline in inflation. Retail inflation in May stood at 2.82%, marking its lowest level in over six years. This sustained drop in inflation—below the RBI’s 4% target for four consecutive months—has given policymakers the room to implement a bold set of monetary measures. Earlier this month, the central bank cut the repo rate by 50 basis points to 5.50% and lowered the cash reserve ratio (CRR) by 100 basis points. These moves aim to inject liquidity into the economy, stimulate consumption, and support investment activity.
Despite these positives, the RBI emphasized that risks remain. The bulletin cited potential disruptions from global trade tensions, upcoming changes in international tariff regimes, and ongoing geopolitical developments as factors that could influence the economy in the coming months. It also highlighted a need to monitor domestic vulnerabilities such as rising household debt, which has increased from 36% to 42% of GDP over the past two years, with credit card debt surging by 50%.
Financial markets have shown mixed signals. While stock markets experienced a rally earlier in the year, a wave of IPOs and increased secondary offerings have raised concerns about overvaluation. Consumer demand, especially in segments like automobile sales, has been uneven.
Looking ahead, the RBI has adopted a neutral policy stance, indicating that future actions will be guided by data. The central bank signaled that while it remains ready to provide further stimulus if required, decisions will be calibrated in response to inflation trends and external pressures.
The RBI’s bulletin paints a picture of an economy that has weathered global disruptions well so far in 2025, but with caution urged as India navigates the next phase of its growth path amid international flux. Key areas to watch include upcoming trade policy shifts in late July, consumption trends, and the effectiveness of recent monetary measures in boosting credit and investment.