Archive · 28 Aug 2026
Economy Shows Resilience as Growth Risks Continue to Loom
The country’s economy appears to be growing steadily.
The central bank expected growth of 7 per cent in the first quarter.
People are still buying vehicles and using electricity, which suggests household spending is healthy.
Tax collections and online shipping documents also remained strong.
Factories produced more goods, helping industrial production rise by 5.8 per cent.
Businesses in manufacturing and services also earned better operating profits.
Banks continued lending to companies and households.
Better monsoon conditions helped farmers sow kharif crops.
However, global conflicts, trade problems, supply shortages, changing energy prices and El Niño could slow growth.
The central bank projected first-quarter economic growth at 7 per cent in its August Monetary Policy Committee meeting.
Economic indicators, RBI economists and the finance ministry report that growth momentum remained strong in the first quarter and beyond.
Household consumption stayed healthy, with firm e-way bill generation, GST revenues, vehicle sales and electricity demand.
Industrial production rose 5.8 per cent during the quarter, while manufacturing and services firms reported improved operating profits.
Growth remains exposed to geopolitical and trade uncertainty, supply-chain pressures, volatile energy prices and a strengthening El Niño.
- Who
- The central bank, economists at the Reserve Bank of India, the finance ministry and economic agencies including Crisil and ICRA.
- What
- The economy is showing resilient growth momentum, although its outlook faces several risks.
- When
- The assessment concerns the first quarter and the period beyond it, following the August Monetary Policy Committee meeting.
- Where
- The country’s domestic economy and its external trade environment.
- Why
- Domestic consumption, industrial activity, bank credit, public investment and monsoon recovery are supporting growth, while geopolitical, trade, supply-chain, energy-price and climate-related risks could weaken it.
- First-quarter growth projection
- 7 per cent, according to the central bank’s August Monetary Policy Committee projection.
- Industrial production
- Rose 5.8 per cent during the quarter, aided by manufacturing.
- Non-oil export growth
- 12.8 per cent in the first four months of the year.
- Public-sector capital expenditure
- The Centre’s expenditure grew by roughly 24 per cent in the quarter.
- Consumption indicators
- E-way bills, GST revenues, passenger vehicle sales, tractor sales and two-wheeler sales remained strong.
- Credit conditions
- Bank credit growth increased briskly across industry and retail lending.
- Key risks
- Geopolitical and trade uncertainty, supply-chain pressures, volatile energy prices and a strengthening El Niño.