Archive · 21 Jun 2025
India's Economy: GDP Growth, Inflation, and Fiscal Deficit Update
India's economy showed strong growth at the end of the last fiscal year.
The central bank lowered interest rates to make borrowing easier and changed its policy to a neutral stance.
Inflation went down, mainly due to cheaper food.
The government is also working to reduce the gap between what it spends and what it earns, aiming for further improvement in the coming year.
India's Q4 FY25 GDP growth reached 7.4%, with 6.5% for the full fiscal year.
The RBI cut the repo rate by 50 basis points to 5.5% in June 2025.
The RBI shifted its monetary policy stance from 'accommodative' to 'neutral'.
Retail inflation dropped to 2.82% in May 2025, the lowest since February 2019.
India's fiscal deficit was 4.8% of GDP in FY25, with a target of 4.4% in FY26.
- Who
- The Reserve Bank of India and the Indian government.
- What
- Recent economic trends and key indicators in India.
- When
- May-June 2025
- Where
- India
- Why
- To provide an overview of the economic conditions.
Economic Indicators
Fiscal indicators
Economic outlook
Economic Indicators
Encouraging economic growth.
Fiscal indicators
Concerns regarding fiscal deficit.
- Q4 FY25 GDP Growth
- 7.4%
- FY25 GDP Growth
- 6.5%
- Repo Rate (June 2025)
- 5.5%
- Retail Inflation (May 2025)
- 2.82%
- FY25 Fiscal Deficit
- 4.8% of GDP
Sources
RBI’s Monetary Policy Committee voted 5-1 to cut repo rate by 50 basis points
RBI Guv opined neutral stance for flexibility to ‘cut, pause or hike rates’, MPC minutes
Limited space for more rate cuts in 'fragile and fluid' world - CNBC TV18
MPC minutes: RBI Guv expects rate cut front-loading to support growth amid global tension
With sharp decline in inflation, monetary policy needs to support growth: RBI Governor
Room for more rate cuts if inflation holds, say RBI MPC members Ram Singh and Nagesh Kumar
