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RBI
October MPC Outcome 2025: The Reserve Bank of India (RBI) has revised the real GDP growth projection for this financial year 2025-26 upward to 6.8 per cent from the earlier estimate of 6.5 per cent, showing stronger-than-expected economic performance.
The MPC unanimously decided to keep the repo rate unchanged at 5.5 per cent for the 2nd time after the August MPC meet. Previously, the central bank had cut the benchmark rate by 100 bps throughout the year amid the softening inflation.
Moreover, RBI kept the stance “neutral”, which is similar to August MPC stance.
Domestic economic activity remains resilient, supported by strong private consumption, government consumption and fixed investment, RBI said in the growth outlook.
An above-normal southwest monsoon, congenial financial conditions,
rising capacity utilisation, the government’s continued thrust on capital expenditure, and GST 2.0 reforms augured well for the growth outlook, RBI added.
However, outlook remains uncertain due to external demand uncertainty driven by tariffs; prolonged geopolitical tensions; and volatility in global financial markets.
Looking at the quarterly-wise, the real GDP growth rate will remain at 7 per cent in Q2; 6.4 per cent in Q3; and 6.2 per cent in Q4. Real GDP growth for Q1:2026-27 is projected at 6.4 per cent.
Headline CPI inflation declined to its eight-year low of 1.6 per cent (y-o-y) in July 2025 before rising to 2.1 per cent in August – its first increase after nine months. Benign inflation conditions during 2025-26 so far have been primarily driven by a sharp decline in food inflation from its peak of October 2024.
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