The Reserve Bank of India (RBI) on Wednesday revised its real GDP growth forecast for FY2026-27 to 6.7 per cent, up from the earlier projection of 6.6 per cent, while describing India as the world’s fastest-growing major economy despite persistent global uncertainties.
Announcing the Monetary Policy Committee’s (MPC) decision, RBI Governor Sanjay Malhotra said domestic economic activity has remained resilient, supported by strong demand, sustained expansion in manufacturing and services, and robust exports.
The Monetary Policy Committee (MPC) kept the policy repo rate unchanged at 5.25 per cent and maintained its neutral policy stance amid global trade uncertainties and geopolitical tensions.
The RBI has projected GDP growth at 7 per cent in the first quarter of FY27, 6.4 per cent in the second quarter, 6.5 per cent in the third quarter and 6.8 per cent in the fourth quarter.
Malhotra said high-frequency economic indicators for the first quarter and early corporate earnings point to healthy momentum in the manufacturing sector.
On inflation, the RBI Governor said headline inflation is expected to rise due to supply-side pressures from food and fuel prices, while core inflation is likely to remain moderate and ease after peaking in the third quarter.
He said the inflation outlook remains uncertain due to factors such as the progress of the southwest monsoon, the possibility of El Niño conditions, geopolitical developments and global trade policy. Greater clarity on the inflation trajectory and its composition would be needed before any further monetary policy action, he added.
Referring to the global environment, Malhotra said supply-side pressures arising from the West Asia conflict had eased after June, but renewed escalation since early July has increased volatility in energy prices and revived concerns over global supply chains.
He also noted that underlying inflation, measured by core inflation excluding precious metals, has remained benign and is expected to gradually align with overall core inflation by the end of the financial year.
The revised growth projection reflects the RBI’s assessment that India’s domestic economic fundamentals remain strong even as global uncertainties continue to pose risks to growth and inflation.
-IANS
