Mumbai: Reserve Bank on Friday raised the GDP growth projection to 7.3 per cent for the current fiscal from its earlier estimate of 6.8 per cent following robust economic performance in the July-September quarter.

The Gross Domestic Product (GDP) registered a six-quarter high growth of 8.2 per cent in Q2 of 2025-26, underpinned by resilient domestic demand amidst global trade and policy uncertainties.

On the supply side, real Gross Value Added (GVA) expanded by 8.1 per cent, aided by buoyant industrial and services sectors.

Unveiling the December monetary policy, Reserve Bank Governor Sanjay Malhotra said economic activity during the first half of 2025-26 benefited from income tax and Goods and Services Tax (GST) rationalisation, softer crude oil prices, front-loading of government capital expenditure, and facilitative monetary and financial conditions supported by benign inflation.

High-frequency indicators suggest that domestic economic activity is holding up in the October-December quarter, although there are some emerging signs of weakness in few leading indicators, he said.

"GST rationalisation and festival-related spending supported domestic demand during October-November," he said and added rural demand continues to be robust while urban demand is recovering steadily.

Also, investment activity remains healthy with private investment gaining steam on the back of expansion in non-food bank credit, and high capacityutilisation.

The governor also noted that merchandise exports declined sharply in October amid subdued external demand, accompanied by softer services exports.

On the supply side, agricultural growth is supported by healthy kharif crop production, higher reservoir levels and better rabi crop sowing.