Union Budget 2026: India will remain fastest growing economy in world, says RBI

Representational image. File pic

India will remain the fastest-growing major economy in the world, said the Reserve Bank of India (RBI) ahead of the Union Budget 2026.

The statement comes amid recent global uncertainties.

The RBI stated that the current state of the Indian economy provides ground for optimism going forward. Also, the GDP growth estimates for 2025-26 indicate that

The banking regulator of India has further said that India has made significant efforts to diversify and strengthen its exports, aiming to mitigate external sector risks.

RBI, in their monthly bulletin, wrote, "The country is currently engaged in trade negotiations with 14 countries or groups, representing nearly 50 nations, including the European Union, Gulf Cooperation Council countries, and the United States," as cited by IANS.

RBI hints at India's GDP growth

The first advance estimates of real GDP growth for 2025-26 reflected the resilience of the Indian economy, driven by domestic factors amid a challenging external environment.

Furthermore, high-frequency indicators for December suggest continued buoyancy in growth impulses with demand conditions remaining upbeat.

The RBI report also highlighted, "Headline CPI inflation edged up in December but remained below the lower tolerance level. The flow of financial resources to the commercial sector has increased over the past year, with both non-bank and bank sources contributing to the credit pick-up," as per IANS.

Factors indicating growth prospects

The month of December saw India concluding trade negotiations with New Zealand and Oman.

Last year India also witnessed major economic reforms, including the rationalisation of tax structures, implementation of labour codes for labour market reforms, and financial sector deregulation. All of these reforms and deals are expected to strengthen the growth prospects in the next few years.

The Reserve Bank's 'Report on Trend and Progress of Banking in India 2024-25' also underscored the resilience of the banking system, supported by strong capital buffers, improved asset quality, and robust profitability.

The Reserve Bank of India in their monthly bulletin also mentioned, "Going forward, the policy focuses on striking a balance between innovation and stability, consumer protection, and a prudent approach to regulation and supervision should help improve productivity and support long-term economic growth," as per IANS.

(With inputs from IANS)