India’s financial system posted a strong efficiency within the monetary 12 months 2024-25 (FY25), clocking actual GDP progress of 6.5%, pushed by robust home demand, resilient rural consumption, and buoyant companies exercise, in keeping with the Ministry of Finance’s Month-to-month Financial Evaluation for Could 2025.
The momentum picked up notably within the January-March quarter (This fall FY25), with progress accelerating to 7.4% year-on-year, fuelled largely by a formidable 10.8% enlargement in development exercise and a 7.3% rise in companies output. Sectors comparable to actual property, hospitality, and data expertise contributed considerably to companies progress, underscoring the financial system’s structural resilience regardless of world headwinds.
Agriculture and allied actions additionally supported the financial system, benefiting from a beneficial harvest season and authorities interventions aimed toward stabilising meals provides and costs.
On the inflation entrance, the report highlighted welcome reduction for shoppers. Retail inflation eased to 2.8% in Could 2025, the bottom degree since February 2019, with meals inflation slipping beneath 1%. The moderation was attributed to wholesome crop output and efficient coverage measures, together with strategic releases from meals shares.
In response to the easing inflationary pressures, the Reserve Financial institution of India (RBI) lowered the repo price by 50 foundation factors in June, bringing it down to five.5%, and marking a cumulative lower of 100 foundation factors since February 2025.
Externally, India’s commerce efficiency confirmed indicators of restoration. The nation’s complete exports, combining items and companies, rose by 2.8% year-on-year in Could, reaching $71.1 billion. In the meantime, the commerce deficit narrowed sharply to USD 6.6 billion, down from USD 10.5 billion in April, supported by decrease crude oil costs, which fell to round USD 67 per barrel following geopolitical easing in West Asia.
International alternate reserves remained strong, standing at $699 billion, sufficient to cowl roughly 11.5 months of imports—a key sign of exterior sector stability.
On the employment entrance, the formalisation of jobs continued, with the Workers’ Provident Fund Organisation (EPFO) reporting 19.1 lakh web additions in April 2025. Nevertheless, the general labour drive participation price stood at 54.8%, with unemployment edging barely increased to five.6% amid world financial uncertainties.
As India strikes into FY26, economists stay cautiously optimistic. The report emphasised that sustaining progress momentum would rely on sustaining home consumption, boosting funding, and navigating potential world dangers.
