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Informist, Wednesday, Aug. 5, 2026

 

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--RBI revises FY27 GDP growth forecast to 6.7% from 6.6?rlier 
--RBI revises Apr-Jun GDP growth forecast to 7.0% from 6.6?rlier 
--RBI revises Jul-Sept GDP growth forecast to 6.4% from 6.3?rlier 
--Retains Oct-Dec GDP growth forecast at 6.5% 
--RBI retains Jan-Mar GDP growth forecast at 6.8%
--Risks to growth forecasts are evenly divided
--Domestic econ activity continues to be resilient
--Growth continues to be supported by strong demand
--See sustained expansion in mfg, services activity
--MPC noted growth outlook hazy on monsoon uncertainty
--Growth resilient but may be lower in FY27
--MPC noted need for greater clarity before policy action
--High frequency data show domestic econ activity resilient Q1
--Consumption up, invest activity steady
--Invest activity remains steady on govt spending
--Early Q1 results indicate healthy performance of mfg cos
--Consumption up on pvt spending, govt capex strong
--Pvt consumption remained up on buoyant discretionary spending
--Mfg sector may face cost pressure
--Diversification of supply chains to help mfg sector
--Services sector may remain bouyant on strong demand
--Steady employment conditions should aid urban sector growth
 

 

 

 

MUMBAI – The Reserve Bank of India Wednesday increased the GDP growth forecast for 2026-27 (Apr-Mar) to 6.7% from 6.6?rlier. The central bank also increased its growth estimates for the June quarter to 7.0% from 6.6% and that for the September quarter to 6.4% from 6.3%. 

 

The RBI projected growth of 6.5% for the December quarter and 6.8% for the March quarter. Conflict in West Asia, volatile oil prices, sticky inflation expectations, and fragile public finances in systemic economies pose significant downside risks to the outlook, RBI Governor Sanjay Malhotra said. 

 

RBI reiterated confidence in the country's growth outlook, saying resilient domestic demand, sustained expansion in manufacturing and services, and robust exports continue to underpin economic activity despite heightened global uncertainties. Malhotra said India remains the world's fastest-growing major economy.

 

In his monetary policy statement, the governor said, "Growth continues to be supported by resilient domestic demand, sustained expansion in manufacturing and services activity, and robust exports, reaffirming India's position as the world's fastest-growing major economy."

 

The governor acknowledged that while domestic growth remains resilient, the outlook has weakened amid global and domestic risks. "Growth, albeit resilient, is expected to be lower in 2026-27. The outlook, however, is hazy because of the uncertainties regarding Southwest monsoon, El Nino, geopolitics and global trade policy," he said, adding that policymakers require "greater clarity" on the inflation trajectory before taking any policy action.

 

Reviewing the current state of the economy, Malhotra said the easing of supply-side disruptions since June had supported domestic activity, although renewed escalation of the conflict in West Asia since early July had increased volatility in energy prices and revived concerns over global supply chains. Despite these headwinds, he said high-frequency indicators pointed to resilience in the economy during the June quarter. "Amidst persistent global uncertainty, domestic economic activity has exhibited resilience as reflected by the high-frequency indicators available for Q1, 2026-27," the governor said.

 

He noted that early corporate earnings indicated healthy manufacturing performance, services activity continued to gather momentum on the back of strong domestic demand, private consumption remained supported by buoyant discretionary spending, investment activity was steady due to robust government infrastructure spending, and merchandise exports had rebounded with double-digit growth while services exports maintained momentum. "Overall, the India economy performed better than expected in Q1," he said.

 

Looking ahead, Malhotra flagged several risks to growth, particularly an uneven and deficient Southwest monsoon under El Nino conditions and renewed geopolitical tensions. However, he said multiple domestic factors should help cushion the economy. He said government initiatives on climate-resilient agriculture, continued strength in services, steady employment conditions, robust credit flows, sustained infrastructure spending and stronger external demand supported by bilateral trade agreements and market diversification would help maintain growth momentum. At the same time, "Renewed tensions in West Asia which are disruptive of global supply chains, volatility in international financial markets, and weather-related shocks, however, pose downside risks to growth," he said. 

 

Concluding his remarks on the economy, the governor said the West Asia conflict had adversely affected the domestic growth outlook but stressed that India's macroeconomic fundamentals remained strong.

 

"While these have impacted the domestic growth-inflation outlook adversely, the stronger macroeconomic fundamentals of the Indian economy are helping navigate this global shock resolutely," he said. Malhotra added that the current environment presents "an opportunity to accelerate measures to enhance our resilience to withstand such shocks" and affirmed that the RBI would continue implementing policies to support sustainable growth.  End

 

Reported by Kabir Sharma and Vaishali Tyagi

Edited by Deepshikha Bhardwaj

 

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