The Reserve Bank of India cut the repo rate by 25 bps to 5.25% citing easing inflation and strong growth, which has been termed it a “rare Goldilocks period” for the economy.

About
A Goldilocks economy is an economic situation where growth is strong and sustainable while inflation remains low and stable, without overheating or slipping into recession.

Key Features
• Balanced Growth: High and steady GDP growth without economic overheating.
• Low Inflation: Price levels remain stable, reducing cost-of-living pressures.
• High Employment: Strong job creation and stable labour market conditions.
• Policy Space: Gives central banks more flexibility to support growth through accommodative policies.
• Temporary Nature: It is an ideal but short-lived phase that policymakers aim to sustain.