The new year has begun, and this year promises a series of good news one after the other. The first bit of positive news is that your loan EMIs will be reduced. Economic experts predict that the RBI might cut the repo rate during its monetary policy announcement in February. This will lower the EMI on all your loans, including home and car loans. The RBI has not reduced interest rates in the last two years due to inflation, but it is now expected to cut the repo rate.
The differences between the Finance Ministry and the RBI over concerns about the slowdown in GDP and the debate between growth and inflation are creating significant focus. All eyes are on the possible rate cut in February when the Monetary Policy Committee of the central bank will meet for the first time under the leadership of new governor Sanjay Malhotra. The committee’s meeting will follow closely after the Union Budget for the financial year 2025-26 is presented, which will outline the economic and fiscal plans of the Modi 3.0 government.
India’s GDP to Grow in 2025
India’s economy is expected to improve in 2025, leaving behind the slowdown seen in the September quarter. Economists from the Reserve Bank of India (RBI) say that indicators for the third quarter (July-September) of 2024-25 show positive signs. Strong festive activity and steady growth in rural demand are driving the economy forward. While the country’s economic growth dropped to 5.4% in July-September, the lowest in seven quarters, Union Finance Minister Nirmala Sitharaman called it a ‘temporary setback.’ She stated in Parliament that the slower-than-expected growth in the second quarter is just a short-term issue and the economy will grow at a healthy rate in the coming quarters.
Job Opportunities Set to Increase
With the economy picking up and more government spending, job opportunities will increase in key sectors like infrastructure and manufacturing. This is great news for the youth. The upcoming budget in February may also announce measures to create more jobs. In last year’s budget, the government focused on job creation, and a similar focus is expected this year. ICRA Chief Economist Aditi Nair pointed out that despite global uncertainties and other challenges, India’s economic outlook remains positive. She mentioned that the 2025-26 Union Budget will lay out a new fiscal plan, and recommendations from the next Finance Commission will guide fiscal policies. However, due to global uncertainties, private sector expansion may proceed cautiously, especially when it comes to exports.