YEAR OF CONTRADICTIONS

Even as GDP growth kept 'surprising' on the upside, equity and currency markets failed to mirror this optimism

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OUTGOING 2025 was a year of contradictions for the economy, marked by both resilience and strands of fragility. Even as GDP growth kept "surprising" on the upside quarter after quarter, equity and currency markets failed to mirror this optimism. Benchmark indices the Sensex and the Niftyclocked single-digit returns, even as the IPO market exhibited unrelenting exuberance.

The rupee saw a roller coaster ride, emerging as one of the worst-performing currencies in Asia, shedding over 5% against the dollar. The central bank kept pumping liquidity into the economy, delivering a cumulative 125 basis points rate cuts as inflation fell to a decadal low of 0.25% in October. Yet, the government had to step in aggressively in late September with a major GST rate cut to revive consumption.

Corporate profits failed to excite, and foreign portfolio investors (FPIs) continued dumping Indian equities as uncertainty grew over global trade and geopolitical tensions. The $5 trillion economy target remained elusive in 2025, while concerns over inequality, high tax burden and rising cost of living grew louder. The advent of AI added another layer of disruption to the mix. Here are the top trends of 2025 that shaped the economy and underlined its idiosyncrasies:

Trade disruptions