RBI lowers GDP forecast, keeps repo rate steady at 6.50%
THE JHARKHAND STORY DESK Mumbai, Dec 6: The Reserve Bank of India’s (RBI) three-day Monetary Policy Committee (MPC) meeting concluded today,…
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THE JHARKHAND STORY DESK
Mumbai, Dec 6: The Reserve Bank of India’s (RBI) three-day Monetary Policy Committee (MPC) meeting concluded today, December 6, having commenced on December 4.
Following the meeting, RBI Governor Shaktikanta Das announced, by a 4-2 majority, the decision to keep the monetary policy rates unchanged. For the 11th consecutive time, the repo rate remains steady at 6.5%. As a result, there will be no reduction in EMIs for home and car loans in the coming days.
The RBI last revised the repo rate in February 2023. This marks only the second time in 25 years that the central bank has maintained the repo rate unchanged for such an extended period. Between May 2022 and February 2023, the Reserve Bank raised the repo rate by 2.50% to control inflation.
GDP growth forecast lowered from 7% to 6.6%
The RBI has revised its GDP growth forecast for the current financial year downward to 6.6%, from the earlier estimate of 7%. This marks the second consecutive reduction in GDP projections by the RBI. In October, the MPC had lowered the GDP estimate from 7.2% to 7%.
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However, there has been no revision to the second-quarter GDP estimates. The third-quarter projection has been lowered from 7.4% to 6.8%, while the fourth-quarter growth estimate has been revised down from 7.4% to 7.2%.
For the first quarter of the previous financial year, the GDP growth forecast was reduced from 7.3% to 6.9%. For the next financial year, the GDP growth is projected to be 7.3%.
Increase in inflation forecast
On the inflation front, the RBI has delivered another significant update. Governor Shaktikanta Das announced an increase in the inflation forecast for the third quarter, from 4.8% to 5.7%. Similarly, the fourth-quarter projection has been raised from 4.2% to 4.5%. The inflation estimate for the first quarter of FY 2026 has been revised upward from 4.3% to 4.6%. For the second quarter of FY 2026, inflation is expected to remain at 4%.
The inflation forecast for the current financial year, initially pegged at 4.5%, has now been raised to 4.8%.
