India’s monetary policy now rests on a delicate balancing act. Inflation, once the main concern, has retreated sharply, yet growth momentum remains below aspiration. The Reserve Bank of India is expected to hold the repo rate steady in its August 2025 review, allowing earlier policy easing to filter through the financial system before deciding on fresh moves in October.Data from the Ministry of Statistics and Programme Implementation showed GDP growth slowing to 6.5% in 2024-25 from 8.2% a year earlier. Inflation averaged 4.6% against 5.4% in 2023-24, slipping well below the RBI’s 4.7% forecast. By June 2025, consumer prices had dropped to 2.1%, the lowest in over six years, with food costs turning negative. The central bank now projects average inflation of 3.7% for 2025-26 and sees scope for an even lower outturn.
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