Growth outlook for FY26 remains strong

The growth outlook for FY26 remains strong, supported by domestic demand, lower inflation, monetary easing, and the positive effects of GST reforms despite global economic and trade policy uncertainties, a Finance ministry report said on Monday.

- OUR CORRESPONDENT

“Against a global backdrop characterised by economic and trade policy uncertainty, India’s economy gained momentum in Q2 FY26. This is particularly significant, as the United States imposed higher tariffs on India in August” the ministry said in its monthly economic review.

Various supply-side High Frequency Indicators (HFls) have displayed healthy trends while demand conditions continued to improve with the GST reforms and festive season sentiments spurring consumption, it said.

“The growth outlook for FY26 remains strong, supported by domestic demand, favourable monsoon conditions, lower inflation, monetary easing, and the positive effects of GST reforms. Consequently, the IMF and the RBI have revised their growth forecasts for India for FY26 upwards from 6.4 per cent and 6.5 per cent to 6.6 per cent and 6.8 per cent, respectively,” it said.