Published: 30 September 2025RBI / PIB / DD NewsEconomy
RBI Raises India's GDP Growth Forecast to 7.3% for FY 2025-26
The Reserve Bank of India revised India's real GDP growth forecast for FY 2025-26 upwards to 7.3% from its earlier estimate of 6.8%, backed by strong agricultural prospects following a good monsoon, the continued positive impact of GST rate rationalisation, healthy corporate and bank balance sheets, and resilient domestic consumption demand. India's headline CPI inflation was projected to ease to 2.6%, down from 3.1% in earlier estimates, creating what RBI Governor Sanjay Malhotra described as a rare 'Goldilocks' scenario.
The RBI kept the repo rate unchanged at 5.50% with a neutral stance, signalling comfort with the current monetary conditions. In Q2 FY 2025-26, India's GDP had expanded 8.2% — one of the fastest among major economies — driven by manufacturing, services, and robust government capital expenditure. This positive macroeconomic outlook is particularly important for RPSC aspirants as it contextualises Rajasthan's revenue position and state government expenditure capacity.
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To what rate did the RBI revise India's real GDP growth forecast for FY 2025-26 in its December 2025 policy review?
Explanation · Correct answer DIn the December 2025 monetary policy review, the RBI revised India's real GDP growth forecast for FY 2025-26 upward to 7.3% from the earlier 6.8% estimate. The October 2025 review had raised the projection to 6.8%, so the original October wording was inaccurate for the stored answer.
Frequently asked questions
What upward revision did the RBI make to India's GDP growth forecast for FY 2025-26, and what was the previous estimate?
The RBI revised India's FY 2025-26 GDP growth forecast upward from 6.8% to 7.3%, citing strong Q2 GDP growth of 8.2% and robust domestic demand.
What is the 'Goldilocks' economy, and how did the RBI Governor apply this term to India?
A 'Goldilocks' economy refers to a macroeconomic condition where growth is neither too hot (overheating) nor too cold (stagnation), but just right — balanced growth with low inflation. The RBI Governor used this term to describe India's FY 2025-26 state, with 7.3% GDP growth and only 2.6% CPI inflation.
What repo rate did the RBI maintain, and what was its monetary policy stance?
The RBI held the repo rate steady at 5.50% with a neutral monetary policy stance, signalling neither easing nor tightening of monetary conditions in the near term.
What is the Monetary Policy Committee (MPC) and what is its statutory basis?
The Monetary Policy Committee (MPC) is the statutory body constituted under the RBI Act 1934 (as amended in 2016) that decides the repo rate and overall monetary policy stance in India. It has 6 members — 3 from RBI and 3 external experts appointed by the government.
What CPI inflation was projected for FY 2025-26, and why is this significant?
CPI inflation was projected at 2.6% for FY 2025-26, which is among the lowest in recent years. This low inflation alongside high GDP growth (7.3%) is what earned India the 'Goldilocks' economy description, as it indicates price stability without sacrificing growth.
