Mumbai, February 26 – India's economic growth appears to be rebounding from its recent slowdown, with the worst seemingly behind, according to a German brokerage Deutsche Bank report. The report projects GDP growth to rise to 6.2% in the December quarter, following a dip to a seven-quarter low of 5.4% in the September quarter.
Despite this recovery, the bank’s analysts cautioned that growth will remain below the potential rate of 7% in FY26. They also highlighted the need for caution, as revisions in past economic data could alter forecasts.
The brokerage's leading indicator, based on 65 high-frequency indicators, supports the 6.2% growth projection, reinforcing optimism about the economy’s trajectory.
RBI Likely to Cut Interest Rates in April
The Reserve Bank of India (RBI) is expected to announce a 25-basis-point rate cut in its April monetary policy review to further support economic growth. The latest monetary policy meeting minutes revealed that all members of the six-member panel consider current interest rates restrictive.Following the April cut, RBI is expected to shift its focus to liquidity measures to ensure effective transmission of the 0.50% repo rate reduction to the broader economy. However, the report suggests that further rate cuts are unlikely in the current cycle.
Liquidity Measures in Focus
The central bank’s recent USD 10 billion swap announcement has been deemed an "encouraging" move, indicating its awareness of liquidity requirements. Analysts expect the RBI to continue monitoring liquidity conditions to maintain stability.The official GDP data is set to be released soon, which will provide a clearer picture of the economy’s recovery path.
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