RBI Raises FY27 GDP Growth Forecast To 6.7%; Keeps Repo Rate Unchanged

The Reserve Bank of India (RBI) on Wednesday projected India’s real GDP growth at 6.7 per cent for FY27, raising its earlier estimate of 6.6 per cent by 10 basis points.

RBI Governor Sanjay Malhotra said India continues to remain the world’s fastest-growing major economy despite persistent global uncertainties.

The Governor projected GDP growth at 7 per cent for Q1, 6.4 per cent for Q2, 6.5 per cent for Q3 and 6.8 per cent for Q4 of FY27. He said resilient domestic demand, sustained expansion in manufacturing and services, healthy investment activity and robust exports continue to support economic growth.

Malhotra said high-frequency corporate earnings for the first quarter reflected strong domestic economic activity. He added that ssupply-sidepressures from the West Asia conflict eased after June.

Renewed tensions since early July have increased volatility in energy prices and revived supply chain concerns.

The RBI also projected consumer price inflation at 5 per cent for FY27.

Quarterly inflation is expected at 4.7 per cent in Q2, 5.9 per cent in Q3 and 5.5 per cent in Q4, while Q1 FY28 inflation is projected at 5.3 per cent.

The Governor noted that headline inflation rose to 4.4 per cent in June after remaining below the RBI’s 4 per cent target for 16 consecutive months.

Core inflation remained moderate, while underlying inflation excluding precious metals stayed benign.

The Monetary Policy Committee kept the repo rate unchanged at 5.25 per cent and retained its neutral policy stance.

Malhotra said the RBI requires greater clarity on inflation trends before considering any policy action. He also cited risks from El Nino, global trade uncertainty, geopolitical developments and crude oil price volatility.

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