The Reserve Bank of India’s Monetary Policy Committee (MPC) on Friday increased its growth outlook for the country, revising the GDP forecast for FY 2025-26 to 7.3 per cent, up from the earlier estimate of 6.8 per cent. The RBI also raised its growth projections for the upcoming quarters, Q3 FY26 to 7.0 per cent (from 6.4 per cent) and Q4 FY26 to 6.5 per cent (from 6.2 per cent). Looking ahead, growth in Q1 FY27 is now estimated at 6.7 per cent, while Q2 FY27 is projected at 6.8 per cent, reflecting stronger economic momentum.
The upward revisions come after stronger-than-expected GDP numbers in the September quarter. India’s economy performed impressively in July–September, recording 8.2 per cent growth, the highest in six quarters, supported by a sharp rise in consumer spending, helped partly by reduced GST rates towards the end of the period.
In comparison, GDP grew 7.8 per cent in the previous quarter and 5.6 per cent in the same quarter last year, reflecting both strong momentum and a low-base effect.
“A 25 bps rate cut signals a clear intent of monetary policy to support growth while inflation stays restrained. With borrowing costs declining, we expect project construction to accelerate and consumer demand to pick up significantly. For commercial real estate, lower funding costs and improved leasing activity are likely to fast-track occupier expansion and support new developments.” said Mr Shrinivas Rao, CEO of Vestian.
“The 25-basis point cut in the repo rate is a bold and welcome move in the current global macro environment. Despite the sliding rupee and other headwinds, this cut is a very strong signal by the RBI about the strength of the Indian economy and its decoupling from the rest of the world macro.” said Mr Piyush Bothra, Co-Founder & CFO, Square Yards.
According to the International Monetary Fund’s (IMF) World Economic Outlook report released in April, India is on track to become the world’s fourth-largest economy by the end of 2025 (FY 2025-26).
The latest rate reduction is expected to boost liquidity and support economic momentum, especially at a time when GDP growth is strong and inflation is steadily easing.
