India’s Growth Momentum Remains Strong Despite Global Uncertainties: BoB Report
India’s economic growth remains on track despite global challenges, supported by robust performance in services and manufacturing, according to a Bank of Baroda report released Friday. The first quarter of FY26 saw improved consumption, driven by higher steel usage, rising electronic imports, and increased government spending.
The services sector showed strong momentum with high services PMI, increased vehicle registrations, diesel consumption, and e-way bill generation. However, concerns remain over weak 2-wheeler sales and a slight dip in consumer durables and FMCG output.
Favourable inflation trends may allow for a softer monetary policy, further aiding growth. A healthy monsoon, with rainfall 15% above average as of July 9, is expected to boost agriculture.
On the fiscal front, the Centre’s deficit narrowed to 4.5% of GDP in May. The rupee is trading with an appreciating bias, helped by easing geopolitical tensions and optimism over an India-US trade deal. Globally, fresh tariffs and policy uncertainty pose risks to growth and inflation.
