New Delhi, December 6 (NationPress) The recent monetary policy outcomes from the Reserve Bank of India (RBI) have sent a clear and reassuring signal that the Indian economy is maintaining a solid foundation, characterized by strong growth and notably low inflation, stated CS Setty, Chairman of SBI and IBA, on Saturday.

The RBI’s upward adjustment of the GDP growth forecast for 2025–26 to 7.3 percent from the prior 6.8 percent highlights the central bank’s positive outlook.

Setty commented, "The choice to reduce rates while leaving the possibility for further easing open is vital for shielding the economy from unforeseen shocks or external challenges."

This decision further reinforces the structural elements supporting a “higher-for-longer” growth path, which encompasses investment, credit, and consumption, he noted.

In its December monetary policy, the RBI lowered the repo rate by 25 basis points to 5.25 percent from 5.5 percent to stimulate the flourishing economy this fiscal year.

The central bank acknowledged that the remarkable economic growth rate of 8.2 percent in the second quarter of the current fiscal year, along with the significant drop in inflation to 1.7 percent, has ushered in a unique “Goldilocks period” for the Indian economy.

Simultaneously, Setty pointed out that concurrent liquidity management measures are designed to stabilize money market rates and reduce borrowing expenses.

"Together, the rate reduction, neutral stance, and targeted liquidity actions aim to maintain economic momentum while ensuring price and financial stability,” Setty emphasized.

SBI Research anticipates that India’s growth rate will exceed 7 percent in the last two quarters (Q3 and Q4), projecting an overall FY26 growth rate of 7.6 percent.

"Post GST rationalization, festive spending has boosted rural demand, while urban demand is on the mend. We expect over 7 percent growth in Q3FY26 and Q4FY26, leading to a total annual growth of 7.6 percent," the report stated.