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Despite high GDP growth, RBI may go ahead with rate cut
The Morning Standard
|November 29, 2025
Experts believe economy may lose momentum in second half of the year, calling for monetary support at a time when inflationary pressures have sharply eased
DESPITE India’s Q2 FY26 GDP growth surprising at 8.2% — well above the Reserve Bank of India’s (RBI) projection of 7% — economists continue to expect a 25 bps rate cut in the first week of December.
Experts believe the economy may lose momentum in the second half of the year, calling for monetary support at a time when inflationary pressures have sharply eased.
Radhika Rao, Senior Economist at DBS Bank, said the Monetary Policy Committee (MPC) faces a tricky decision in the upcoming policy review, given the mix of strong growth and record-low inflation. “We expect an emphasis on forward-looking growth guidance and a high real rate buffer due to weak inflation, to justify a move to lower rates further,” she said.
The RBI has so far cut the repo rate by 100 bps since February.
This story is from the November 29, 2025 edition of The Morning Standard.
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