New Delhi, Dec. 17 -- India's macroeconomic outlook remains constructive even as global uncertainties persist, with policy rates seen at their lowest feasible point in the current cycle, bond yields likely to ease further, and external balances remaining stable, according to the India Economic Outlook 2026 report by Axis Bank Research.

The report notes that "India policy rates have likely bottomed, but 10Y G-Sec yields may move lower," reflecting weak underlying inflation pressures and the need to improve monetary transmission.

While the Reserve Bank of India (RBI) has limited space for further rate cuts, the report expects that "supply-side measures (like issuing more T-bills and shorter-duration bonds) can reduce steepness of the yiel...