Noting that since the October Policy, the Indian economy has witnessed rapid disinflation, Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday (December 5, 2025) announced that the Monetary Policy Committee (MPC) has voted unanimously to cut repo rate by 25 basis points to 5.25%.

The MPC also decided to continue with the neutral stance.

Inflation at a benign 2.2% and growth at 8%, for the first half of this year presents a rare goldilocks period, Mr. Malhotra added. Globally, contrary to earlier expectations, growth has been relatively strong, he said.

Taking various factors into account, real GDP for 2025-26 is projected at 7.3% which is 0.5% more than the earlier projection. CPI inflation for 2025-26 is now projected at 2% which is 0.6% downwards from the earlier projection, the Governor said.