The EcoCapsule discusses key developments which happened in CY25. A year which saw much tumult ended on a calm note, with growth uncannily resilient and tariffs yet to have a telling impact. Inflation eased, and while above Central Bank goals, enabled policy rate cuts. Despite this, long-term yields stayed put, indicating the markets have bigger concerns in mind. Government capex and tax rationalisation kept the domestic GDP engine chugging, but with increasing fiscal pressure, a resurgence in private participation will be key in CY26. CY25 was also a year of policy shifts. The RBI used both the repo and other tools to calibrate the growth-inflation dynamic. Further, regulators simplified multiple regulations, lubricating the cogs of capital, which resulted in the rise of domestic investments amid sombre foreign participation. The Report also provides an outlook for CY26.
