RBI on India's 2025 Economy: How Will It Affect Your Finances?

GDP is expected to grow at a healthy 6.5%. February saw headline inflation dip to 3.6%

As 2025 unfolds, the global economic landscape feels like it’s walking a tightrope. Trade tensions are back with a vengeance, tariffs are creating waves, and global markets are holding their breath. From the US to Europe, volatility seems to be the only constant. But amidst all this, India is quietly charting a different course- steady, resilient, and surprisingly optimistic.

What’s working for us?

Let’s start with the basics. India’s GDP is expected to grow at a healthy 6.5% for 2024-25. That’s not just a number- it’s a reflection of real momentum in consumption and public spending. In the last quarter alone, GDP grew 6.2%, thanks to strong demand from Indian households and a government that’s been spending with purpose.

Agriculture and services are leading the charge, with above-normal rainfall boosting crop output, and a services sector that's adding jobs and business like it's 2019 again. Manufacturing may be wobbling a bit, but even there, employment and purchasing activity are picking up.

Inflation?

Finally, inflation is under control. In February, headline inflation dipped to 3.6%, the lowest in seven months. Food prices, especially vegetables, have eased, giving both households and policymakers a breather. Core inflation is slightly up but manageable.

External headwinds still matter. Global trade is tense. US growth is slowing. Europe is pouring money into defence. Oil prices are see-sawing. Financial markets are skittish. India’s equity markets did feel the heat in February due to foreign outflows, but Indian investors have stepped in to stabilise the ship.

The RBI isn’t sitting idle. From open market operations to currency swaps, it’s been pulling out all the stops to ensure liquidity doesn't dry up and the rupee holds its ground.

But it's not all perfect. Exports saw a dip in February, mainly due to a high base last year and worries about a global slowdown. Auto sales are also showing some weakness, especially in two-wheelers. But rural demand remains solid.

What does this mean for the common person?

Jobs are growing, inflation is cooling, and consumption is holding up. Sure, the global storm clouds are real. But for now, India is weathering them with unusual composure.