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Informist, Wednesday, Oct. 7, 2026

 

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--RBI revises FY27 GDP growth forecast to 7.1% from 6.7?rlier
--RBI revises Jul-Sept GDP growth forecast to 7.2% from 6.4?rlier
--RBI revises Oct-Dec GDP growth forecast to 6.9% from 6.5?rlier
--RBI retains Jan-Mar GDP growth forecast at 6.8%
--RBI Malhotra: Risks to growth forecasts evenly balanced
--RBI Malhotra: Global headwinds may weigh on India growth outlook
--RBI Malhotra: Growth was driven by resilient pvt consumption 
--RBI Malhotra: Growth was driven by resilient pvt consumption Q1
--RBI Malhotra: Growth was driven by strong invest activity Q1
--RBI Malhotra: Svcs exports showed accelerated growth Jul, Aug

 

NEW DELHI – The Reserve Bank of India Wednesday raised its outlook for India's GDP growth for 2026-27 (Apr-Mar) by 40 basis points to 7.1% as the domestic economic activity remained resilient amid global headwinds. The central bank has revised upwards its growth forecast for the September and December quarters of FY27 by 40-80 bps but retained the growth projection for Jan-Mar.

 

The upward revision in growth forecast by 40 bps from the previous projection further underscores the strength of economic activity despite the significant headwinds mentioned earlier, RBI Governor Sanjay Malhotra said. The RBI now projects 7.2% growth in the September quarter, 80 bps higher than the August forecast of 6.4%. For the December quarter, the central bank sees growth at 6.9%, 40 bps higher than the earlier view of 6.5%. The RBI retained 6.8% growth view for the March quarter. The RBI expects the economic growth in Apr-Jun at 7.1%, with risks evenly balanced.

 

Malhotra said that the Indian economy has been strong and the economic momentum remains broad-based. Moreover, the economy is expected to remain resilient. "Domestic economic activity exhibited resilience amidst global headwinds, as evident from year-to-year growth of 7.8% in Q1." The growth in the June quarter was driven by resilient private consumption and strong investment activity while contribution of net exports also remained positive, according to Malhotra.

 

In a first in over three years, the RBI's Monetary Policy Committee raised the policy repo rate by 25 bps to 5.50% Wednesday. "The MPC also decided to change the stance, to calibrated tightening by a majority of 4-2," he said.

 

The re-escalation of the West Asia conflict in September and the consequent hardening and volatility in global crude prices soured global economic sentiment and heightened financial market volatility, Malhotra said. "Although global growth remains resilient, it is projected to decelerate in 2026 from the previous year."

 

The central bank sees downside risks to its India growth outlook weighed due to global headwinds from protracted geopolitical tensions, higher international commodity prices, additional frictions in global trade, and tightening of global financial conditions. Global economic uncertainity and supply chain disruptions are expected to have some bearing on domestic economic activity, Malhotra said. "Furthermore, weak SouthWest monsoon along with strong El Nino conditions may impact the upcoming rabi season and rural demand."

 

That said, the rural consumption is likely to be supported on resilient non-farm activit. "Sustained momentum in services, and broadly stable employment conditions are expected to sustain urban demand," he said.

 

High frequency indicators available so far suggest that economic activity is holding momentum in the September quarter, albeit with some moderation compared to the preceding quarter, Malhotra said. "Services sector activity remained steady and broad-based, owing to buoyant domestic and external demand." Additionally, Purchasing Managers' Index for both manufacturing and services sectors remained in expansionary zone in Jul-Sept, although the pace of expansion slowed from the June quarter. "Private consumption remained broadly resilient in Q2, with continued support from discretionary spending," Malhotra said.

 

With focus on expanding market access and diversification, merchandise exports registered higher double-digit growth during Jul-Aug, Malhotra said. "Services exports also recorded an accelerated growth during July-August 2026."

 

Even as factors such as West Asia war and tariff related uncertainities are weighing on the domestic growth-inflation outlook adversely, the inherent resilience and strength of the Indian economy are helping navigate through these challenging times. Malhotra pitched for implementation of policies that further add to this resilience. "Accordingly, we shall strive for price and financial stability as both are essential for sustainable growth in the long run," he said.  End

 

Reported by Shweta

Edited by Akul Nishant Akhoury

 

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