New Delhi, Dec 5, 2025

The Reserve Bank of India’s decision to cut the repo rate is a move that uses the monetary space created by low inflation to stimulate consumption and strengthen the growth cycle, bankers said on Friday.

Sakshi Gupta, principal economist at HDFC Bank, said the cut was in line with expectations as GDP growth had inched up above 8 per cent in Q2 FY26, the risk from external headwinds on exports continuing to linger on. She said that the sustainability of festive‑season consumption remains uncertain and hence rate cut rightly provides a further counter-cyclical push to consumption and growth.

HDFC Bank analyst forecasted a GDP growth of 7.3 per cent in FY26 and 6.5 per cent in FY27, and inflation at 2 per cent in FY26 and 4 per cent in FY27, adding that inflation is

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