RBI MPC 2025 ET Poll: Rate cut likely amid low inflation, high growth; tough call for Malhotra & co.

Core Insights - The Indian economy grew at 8.2% in the second quarter of FY26, surpassing the RBI's projection of 6.8%, marking the fastest growth in six quarters [5][8] - Retail inflation dropped to 0.25% in October, the lowest since 2015, complicating the RBI's monetary policy decisions [5][8] - A poll of 20 economists showed 12 expect a 25 basis points rate cut to 5.25%, while 8 anticipate the rate will remain unchanged [8] Economic Growth - The nominal GDP growth for the second quarter was recorded at 8.7%, slightly down from 8.8% the previous year [5][8] - Economists are cautious about future growth, with expectations of a slowdown in the second half of FY26 [7][8] Inflation Forecast - The RBI has revised its full-year FY26 inflation estimate down to 2.6% from 4.2% in February, with forecasts of 4% in Q4 FY26 and 4.5% in Q1 FY27 [6][8] - Current estimates suggest inflation could undershoot the RBI's forecast by 50-60 basis points, potentially supporting a rate cut in December [7][8] Monetary Policy Outlook - The RBI has cut the policy rate by 100 basis points since February, maintaining a pause since August, while rates on outstanding loans have decreased by 54 basis points [8] - Economists express mixed views on the upcoming RBI rate decision, with some indicating a need for caution due to low nominal growth numbers [7][8]