RBI Maintains India’s FY26 GDP Growth Target At 6.5% – Key Takeaways From MPC Meet

The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has maintained its growth outlook for the Gross Domestic Product (GDP) of India to 6.5% for the fiscal year 2025-26, the Governor Sanjay Malhotra announced on Friday, June 6.

GDP Growth For All Quarters Of FY26

While the growth rate for FY26 remains unchanged, for the first quarter of FY26, the GDP growth rate is estimated to be at 6.5%, followed by 6.7% for the second quarter, 6.6% for the third quarter and 6.3% for the fourth quarter of this fiscal.

Key Takeaways From MPC Meet

Sanjay Malhotra, the Governor said, "Rural demand remains steady while urban demand is improving," indicating stability in consumption in the country.

He added that the investment activity is also reviving and highlighted that strong growth in merchandise exports in April as well as service exports continue on a strong trajectory. All of these factors eventually contribute to overall growth positively.

Malhotra also added that the "outlook for agri & rural demand [is] expected to receive further impetus from above normal rainfall."

He also warned that "trade policy uncertainty continues to weigh on merchandise export prospects" while flagging "spillovers from global trade tensions, weather-related uncertainties" as the key risks.

Additionally, the RBI MPC has also lowered its inflation forecast for the fiscal year 2025-26 to 3.7%, down from 4% earlier, on the back of a continuous fall in consumer prices.

The MPC has also decided to cut the key lending rate by 50 basis points, which marks the third consecutive rate cut following two previous ones in February and April. The repo rate is currently at 5.5%, down from 6% earlier.

Also Read: RBI Lowers FY26 Inflation Forecast To 3.7% - What Is CPI, Why It Matters, And How It Affects You