RBI State of the Economy Report December 2025: Growth Resilient
Why in the news
Despite trade and policy uncertainty worldwide, RBI’s report said India’s expansion held up, led by private consumption and investment.
Key findings
| Theme | Finding |
|---|---|
| Growth | 8.2% in Q2 FY26, best in six quarters; drivers: consumption and fixed investment |
| November indicators | Activity held up; urban demand firmer; services robust; manufacturing slowing slightly |
| Global | Trade policy uncertainty and volatile finance; volatility eased slightly in November |
| Policy | Repo down 25 bps to 5.25%; 125 bps since February 2025 |
Markets and external sector
- Sentiment improved on healthy corporate earnings and rate cuts by RBI and the US Fed.
- Weak spots: muted foreign portfolio inflows and doubt over the India-US trade deal, causing equity outflows, rupee pressure and forex reserve spillover.
Monetary policy
- MPC voted unanimously, aiming to support growth while using benign inflation.
Exam angle
- Repo: 5.25%; growth: 8.2%.