India's FY 2025-26 GDP Growth Estimated at 7.7%, RBI Retains Repo Rate at 5.25%

Context and Monetary Policy Decision

In its recent bi-monthly meeting in June 2026, the RBI's Monetary Policy Committee (MPC) voted to maintain the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25%. The decision reflects the central bank's focus on the "withdrawal of accommodation" stance to ensure inflation progressively aligns with the target, while remaining supportive of growth.

Economic Growth Projections

The RBI has officially estimated the real GDP growth for the financial year 2025-26 at a robust 7.7%, placing India among the fastest-growing major economies. However, acknowledging global headwinds and localized supply constraints, the MPC lowered the growth forecast for the immediate upcoming period to 6.6%. The central bank emphasized that resilient domestic consumption and sustained capital expenditure by the government will continue to be the primary drivers of growth.

Static GK Fact Check

• Monetary Policy Committee (MPC): Constituted under the Reserve Bank of India Act, 1934. It has 6 members (3 from RBI, 3 independent experts appointed by the GoI).
• Current RBI Governor: Shaktikanta Das (He also acts as the ex-officio chairperson of the MPC).
• Inflation Target: The primary objective of the MPC is to maintain consumer price index (CPI) inflation at 4% within a band of +/- 2%.