There is a sound of recession in the world but India’s speed will surprise!
While on one hand the whole world is struggling with the fear of economic slowdown and recession, on the other hand India’s economy is not only standing strong but is also ready to take a new leap. The indications given by a recent CareEdge report regarding the Indian economy are definitely a relief. According to the report, India’s growth rate is expected to be 7.5% in the financial year 2026, which is much higher than the global average. Where the economies of big countries like America, Britain and Euro Zone are running below their historical average and China’s growth is also slowing down, India’s performance is no less than a miracle.
After all, why is India moving ahead of the whole world?
The report clearly states that despite global challenges and trade uncertainties, India will maintain its pace. The biggest reason for this is the increase in domestic demand and investment. Excellent performance has been seen in the manufacturing and construction sector in the second quarter. Reduction in GST and increasing demand in the market have fueled this.
Globally, the average growth rate in the next five years is estimated to be only 3.1%, while India is set to grow at the rate of 7.5% and 7% respectively in the next two financial years. These figures show how deep and strong the foundation of the Indian economy has become.
What will be the effect on your pocket?
The best news for the common man is on the inflation front. The report estimates that retail inflation (CPI) may decline to an average of 2.1% in fiscal year 2026. This will be possible due to stable prices of food items and softening of commodity prices. Apart from this, the Reserve Bank of India (RBI) has ended 2025 with the most aggressive rate-cut in the last six years. A total reduction of 1.25% has been made in the benchmark rates, which is expected to reduce the burden of home loans and EMIs.
RBI Governor Sanjay Malhotra has also adopted a growth-promoting stance. The central bank has got this confidence due to GDP growth of 8.2% in the July-September quarter and inflation reaching a historic low of 0.25% in October.
Where do we stand against the dollar?
However, there are some challenges also. In the last few months, pressure on the rupee has been seen due to increasing trade deficit and decline in investment. The delay in the US-India trade agreement has also slightly affected the market sentiment. But RBI has shown wisdom and allowed the rupee to adjust gradually instead of interfering too much in the foreign exchange market.
According to the report, the rupee is still about 3% below its real value based on the real effective exchange rate (REER). This means that there is no risk of a huge decline. It is expected that the rupee will get support due to falling interest rates in America and weakening of the dollar. Along with this, foreign investment is expected to increase due to India’s inclusion in the Bloomberg Global Aggregate Index.