After robust January-March quarter growth, high-frequency data suggests weaker April; all eyes on rural consumption

With growth this fiscal widely seen below 6.5 per cent, the Reserve Bank of India’s Monetary Policy Committee (MPC) is expected to reduce the policy repo rate on Friday to 5.75 per centWith growth this fiscal widely seen below 6.5 per cent, the Reserve Bank of India’s Monetary Policy Committee (MPC) is expected to reduce the policy repo rate on Friday to 5.75 per cent.

- GNS News Agency

The Indian economy seemingly had a slow start to 2025-26, with a number of high-frequency indicators suggesting activity levels weakened after the GDP grew by a faster-than-anticipated 7.4 per cent in the final quarter of FY25.

Data released last week showed growth in factory output, as measured by the Index of Industrial Production (IIP), edged down to an eight-month low of 2.7 per cent in April 2025. Before that, the uncertainty caused by the US’ reciprocal tariffs before their quick 90-day suspension saw the merchandise trade deficit widen to a five-month high of $26.42 billion in the first month of the current fiscal.Meanwhile, the HSBC India Purchasing Managers’ Index (PMI) slipped to a three-month low of 57.6 last month from 58.2 in April 2025, which was little-changed from 58.1 in March. Banks’ non-food credit growth cooled to 10.2 per cent year-on-year as on April 18 from 19 per cent a year ago and 11 per cent as on March 22, 2025.

Is Indian economy witnessing cyclical moderation?