India Set to End 2025 on Strong Economic Footing with High Growth and Low Inflation
The government has highlighted an extraordinary period for the Indian economy, forecasting a robust close to 2025 characterized by high growth and low inflation. This “Goldilocks moment” is attributed to a blend of strong domestic demand, structural reforms, and supportive monetary policies.
Key Economic Indicators for 2025
– Gross Domestic Product (GDP):
– India’s real GDP grew by 8.2% in Q2 of the financial year 2025-26, marking a six-quarter high.
– Strong GDP growth followed earlier rates of 7.8% in Q1 and 7.4% in Q4 of FY 2024-25.
– Gross Value Added (GVA):
– Real GVA expanded by 8.1% in Q2 2025-26, driven by growth in both industrial and services sectors, indicating broad-based economic activity.
Inflation Trends
– Consumer Price Index (CPI):
– CPI inflation rates significantly decreased from 4.26% in January 2025 to 0.71% by November 2025, providing the Reserve Bank of India (RBI) with the flexibility to maintain a supportive monetary stance.
– Wholesale Price Index (WPI):
– WPI inflation also moderated, contributing to overall price stability.
Employment Landscape
– Unemployment Rate:
– The unemployment rate fell to 4.7% in November 2025, down from 5.2% in October, the lowest since April 2025.
– Improvements were observed across both urban and rural sectors, enhancing worker participation rates.
Export Performance
– Merchandise Exports:
– Achieved USD 38.13 billion in November 2025, up from USD 36.43 billion in January 2025.
– Services Exports:
– Continued strong performance reflects India’s growing presence in global value chains, especially in software and business services.
Economic Outlook
India boasts a GDP value exceeding USD 4.18 trillion, making it the world’s fourth-largest economy. Projections from both domestic and international institutions suggest ongoing growth momentum through 2026 and beyond. The government remains committed to structural reforms to foster inclusive growth and maintain this economic trajectory.
In summary, India is poised to end 2025 on a high note, marked by strong economic growth and low inflation. This combination lays a solid foundation for future expansion and reinforces India’s position in the global economy.