This Week In Economics (15 – 22 April)
Welcome to another edition of This Week In Economics, where I compile all the biggest economic news of the week in context of India.
Note: There is no need to make notes out of it, you can simply read the headlines and the content once in a while, that’ll be more than enough for most exams.
RBI Holds Rates, Maintains Neutral Position
The RBI, after its April 8 MPC meeting, decided to keep the repo rate unchanged at 5.25%, maintaining a neutral stance due to heightened geopolitical uncertainties in West Asia. This was the second consecutive hold since the December 2025 rate cut.
Inflation Picking Up
India’s annual inflation rate rose to 3.4% in March 2026, up from 3.21% in February, the highest reading in over a year, though still below the RBI’s 4% target. Food inflation climbed to 3.87%.
India also reaffirmed its flexible inflation targeting (FIT) framework, maintaining a 4% retail inflation goal with a 2–6% tolerance band for April 2026 to March 2031.
Rupee Under Pressure
The rupee depreciated 4% during March–April 2026, trading at around ₹95.20 against the US dollar. Rising energy prices pushed US inflation up, shifting Fed rate cut expectations, which reduced interest rate differential support for the rupee.
World Bank India Development Update
The World Bank’s April 2026 India Development Update noted that despite heightened global trade tensions, India remained the fastest-growing major economy in FY26, with growth accelerating to 7.6% from 7.1% in FY25. The current account deficit stood at just 1% of GDP, and fiscal consolidation continued.
However, FY27 growth is projected at 6.6%, reflecting headwinds from the Middle East conflict. The update also discussed India’s February 2026 GDP rebasing (base year updated to 2022-23), which led to a downward revision of nominal GDP levels, reflecting reassessment of the informal economy’s size.
Unemployment
Moody’s Analytics, in a report released on April 22, 2026, projected India’s unemployment rate to rise marginally to 7.0% in 2026 from 6.9% in 2025, the highest among APAC peers, ahead of China (5.4%) and the Philippines (4.7%).
Moody’s also flagged that rising tariffs and global volatility would weigh on trade momentum going forward, after earlier export front-loading ahead of tariff hikes had supported growth.
Banking & Credit
Bank credit stood at ₹214 lakh crore in the fortnight ended April 15, down from ₹218 lakh crore at end-March. The RBI’s new Expected Credit Loss (ECL) framework was flagged as likely to lower CET-1 ratios and increase provisioning for banks in early years.
Ciao, until next week’s edition.
