INDIA Macro Economic Outlook
Download ReportQuantEco Research || INDIA Macrobook - July 2025
Against adverse global currents, IMF however now expects a shallower slowdown in global growth. The international agency has upped its 2025 global growth forecast by 20 bps to 3.0% with India’s growth being revised up to 6.4% in 2025. Domestic consumption to provide a larger support. We maintain our FY26 GDP growth forecast of 6.4% vs, 6.5% in FY25. We expect FY26 to see a decline in the level of inflation as well as its volatility – on account of surplus rainfall, lack of widespread heatwave conditions, and a softer international commodity price backdrop. We now project CPI inflation to ease to 3.0% in FY26, keeping in mind the pace of recent food disinflation. With food disinflation being stronger than earlier anticipated incremental space for monetary policy easing has emerged, esp. at a time of moderate global commodity prices and downside risks to growth. We build in 25 bps rate cut by the MPC, and as such now project repo rate at 5.25% by Aug/Oct 2025. We maintain our call of 10Y g-sec yield at 6.20% for Mar-26. From INR perspective, we remain confident of the domestic macro fundamentals and would look for the contours of the India-US BTA for further cues. We maintain our call of moderate depreciation towards 89.50 by Q4 FY25 as past episodes of global slowdown has generally manifested in a weaker rupee