Despite rising global uncertainties, India’s economy continues to demonstrate resilience across sectors, according to the Reserve Bank of India’s (RBI) Monthly Economic Bulletin for June 2025. The central bank’s latest assessment points to strong economic momentum in May across industrial and services sectors, supported by stable financial conditions and easing inflationary pressures.

The RBI noted that various high-frequency indicators for May signal robust economic activity, further strengthened by a broad-based increase in agricultural production during 2024-25. This agricultural boom, spanning most major crops, has helped keep food inflation in check. In fact, headline inflation remained below the RBI’s target for the fourth consecutive month in May, aided by steady core inflation and a decline in food price pressures.

“India’s economic resilience is notable in light of global challenges such as trade policy uncertainties and geopolitical tensions,” the report stated. It reaffirmed India’s projected GDP growth of 6.5% for FY2024-25, with a significant quarter-on-quarter pickup recorded in Q4.

India also stood out globally in terms of the Purchasing Managers’ Index (PMI) performance, registering the highest overall expansion among surveyed countries. Export orders remained robust, bucking the global trend of contraction. Manufacturing firms reported capacity utilisation levels above their long-term averages, indicating sustained industrial momentum.

On the demand side, high-frequency indicators reflected a recovery in rural consumption, buoyed by strong farm output. Consumer sentiment surveys indicated stable confidence for the present and growing optimism for the near future.

In the financial sector, while bank credit growth slowed in April—especially in agriculture and services—non-bank lending, including external commercial borrowings (ECBs), remained steady. Financial conditions were supportive, enabling effective transmission of recent rate cuts into the broader credit market.

Equity markets, although volatile due to fluctuating global cues and geopolitical tensions—particularly in the Middle East—registered modest gains in May and June. A sharp market dip due to geopolitical developments was followed by a significant recovery on June 20.

The RBI also highlighted the strength of the external sector, citing robust forex reserves capable of covering imports and external debt comfortably.

Overall, the bulletin paints a picture of a resilient Indian economy, navigating global headwinds with strong domestic fundamentals, stable inflation, and a supportive financial ecosystem.