New Delhi: The outlook for the Indian economy is positive for the current fiscal year (FY26), said the finance ministry data. As per the “monthly economic review” of the Finance Ministry for the month of May, High Frequency Indicators (HFIs) such as PMI, e-way bill generation, and fuel consumption showed positive results amid the geopolitical fallout, tariff uncertainty, and global trade wars, as reported by IANS.

The economy showed resilience in the background of robust domestic demand, softening retail inflation, a strong external sector of the economy, and positive employment data.

The positive outlook for the economy is in the offing for FY26 as rural demand has strengthened on the back of a bumper rabi harvesting season and better future prospects of monsoon while simultaneously supported by the positive urban consumption as evidenced by the rise in increased leisure and business travel. However, there exist challenges in the sectors such as automobile and construction, where a slowdown could be expected. Construction inputs and passenger EV vehicle sales have been going down, emphasized the economic review data, the news report mentioned.

The market has seen volatility despite the domestic economy going strong. Markets have seen a bearish run on account of tariff uncertainty and geopolitical fallout.

In the external sector, India’s total exports (merchandise and services) have recorded a rise of 2.8 percent YoY growth for the month of May 2025. This reflects the resilience of Indian exports amid subdued global economic demand, said the data.

Foreign exchange is reported to be around $699 billion, enough to sustain the import cover for 11.5 months. Additionally, Indian rupee has not experienced the higher volatility, the kind experienced by other Asian currencies, said the monthly review data.

Labour market indicators are stable, as evidenced by the sustained white-collar hiring in sectors such as artificial intelligence and machine learning, insurance, and BPO/ITES. The Finance Ministry said formal job creation is on the rise as additions in growing payroll have been observed as per the Employee Provident Fund Organisation (EPFO) data.

Steady economic performance in FY25 shows the resilience of domestic growth drivers amid a challenging global environment. Steady private consumption and resilient services sector activity were key contributors to overall economic expansion.