Page 4 - Policy Economic Report - October 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

According to the latest World Economic Outlook (WEO), global growth is projected to slow from 3.3
percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026, with advanced economies growing
around 1.5 percent and emerging market and developing economies just above 4 percent.

According to IMF, prolonged uncertainty, more protectionism, and labor supply shocks could reduce
growth. Further, fiscal vulnerabilities, potential financial market corrections, and erosion of institutions
could threaten stability.

In case of India, according to the Reserve Bank of India (RBI)’s Monetary Policy Report released in
October, 2025, India’s GDP growth is forecasted for FY 2025-26 at 6.8% from earlier estimate of 6.5%.
Domestic growth is performing well due to strong consumption, investments, and government
spending, with supportive factors like a good monsoon, GST 2.0, better credit flow, and rising capacity
utilisation sustaining the positive outlook.

India’s real GDP grew 7.8% in Q1 FY 2025-26, up from 7.4% in the previous quarter, the fastest pace in
seven quarters, led by strong investment and consumption. Growth for FY 2025-26 is projected at 6.8%
(Q1: 7.8%, Q2: 7.0%, Q3: 6.4%, Q4: 6.2%), while FY 2026-27 is estimated at 6.6%, assuming normal
monsoon and stable conditions.

Consumers’ optimism for the year ahead, which is measured by the future expectations index,
strengthened further for both urban and rural households, remaining in optimistic territory.

Several global agencies have maintained India’s strong economic growth prospects, highlighting the
country’s resilience amid global uncertainties.

IMF (FY26: 6.4%), Fitch (FY26: 6.9%, FY27: 6.3%), S&P Global (FY26: 6.5%), United Nations (FY26: 6.3%,
FY27: 6.4%), CII (FY26: 6.4-6.7%) and OECD (FY26: 6.7%) have noted robust domestic demand,
expanding investments, and a stable external sector as key drivers. Strong policy support, structural
reforms, and a vibrant services sector are further reinforcing the growth outlook. These projections
highlight broad confidence in India’s ability to sustain high growth amidst global challenges.

Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of September,
2025 over September, 2024 is 1.54% (Provisional). There is decrease of 53 basis points in headline
inflation of September, 2025 in comparison to August, 2025. It is the lowest year-on-year inflation after
June, 2017.

The decline in headline inflation and food inflation during the month of September, 2025 is mainly
attributed to favorable base effect and to decline in inflation of Vegetables, Oil and fats, Fruits, Pulses
and products, Cereal and products, Egg, Fuel, and light etc.

Further, RBI has lowered its CPI inflation forecast for FY 2025–26 to 2.6%, down from 3.1%. While the
inflation was earlier projected at 3.8% (Q4 FY 2024-25) and 3.6% (Q1 FY 2025-26), the actual outcomes

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