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Informist, Wednesday, Oct. 7, 2026

 

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--RBI Report: Took baseline assumption for rupee at 95/$ for Oct-Mar 
--RBI Report: Hiked baseline assumption for crude oil by $10/bbl for Oct-Mar 
--RBI Report: Took baseline assumption for crude oil at $95/bbl for Oct-Mar 
--RBI Report: Survey shows GDP growth at 6.8% in Jan-Mar 
--RBI Report: Survey shows GDP growth at 6.9% in Oct-Dec 
--RBI Report: See FY27 real GDP growth at 7.1% 
--RBI Report: Survey shows GDP growth at 7.2% in Jul-Sept 
--RBI Report: See quarterly GDP growth rates 6.8-7.1% till Jul-Sept FY28 
--RBI Report: See FY28 real GDP growth at 7% 
--RBI Report: Geopolitical tensions, volatile global mkts risk to growth view 
--RBI Report: El Nino poses risks to agri output, reservoir replenishment 
--CONTEXT: RBI releases October monetary policy report 
--RBI Report: Survey shows CPI inflation at 5.5% in Jan-Mar 
--RBI Report: Survey shows CPI inflation at 5.9% in Oct-Dec 
--RBI Report: See Jul-Sept CPI inflation at 4.9% 
--RBI Report: See CPI inflation in range of 4.3-4.7% till Q2 FY28 

 

MUMBAI – Forecasters surveyed by the Reserve Bank of India expect inflation excluding food and fuel to remain in the range of 4.3-4.7% through Jul-Sept 2027, according to the Monetary Policy Report released Wednesday. Headline CPI inflation is expected to rise to 5.9% in Oct-Dec from 4.9% in Jul-Sept before easing to 5.5% in Jan-Mar and 4.7% in Jul-Sept 2028, the report said.

 

The survey of professional forecasters showed real GDP growth at 7.2% in Jul-Sept 2027 and 6.9% in Oct-Dec, before moderating to 6.8% in Jan-Mar. Growth is expected to remain in the 6.8-7.1% range over the subsequent four quarters, the report said.

 

The RBI's baseline projections put real GDP growth at 7.1% in 2026-27 (Apr-Mar) and 7.0% in FY28. The RBI said the risks to its FY27 growth projection are evenly balanced.

 

The central bank said the domestic economy remained resilient in the first half of FY27 despite global uncertainty. Real GDP grew 7.8% in Apr-Jun, supported by strong private consumption and investment, while manufacturing and services recorded robust growth. Gross fixed capital formation grew 11.9% in Q1, while private consumption expanded 7.1%. 

 

The RBI's baseline assumes Brent crude oil at $95 a barrel during Oct-Mar, up from the earlier assumption of $85 for FY27. For FY28, the crude oil assumption has been retained at $85 a barrel. The central bank also revised its baseline exchange-rate assumption to INR 95 per dollar for FY27 from INR 94 earlier.

 

The RBI said the rupee traded in a range of 92-97 per dollar during Apr-Sept, with portfolio outflows and heightened global uncertainty weighing on the currency. The rupee subsequently recovered with easing geopolitical tensions and measures to attract foreign capital, including the dollar-rupee swap window for foreign currency non-resident (bank) deposits, before weakening again as crude oil prices rose. 

 

On inflation, the RBI's own baseline projection sees headline CPI inflation averaging 5.2% in FY27 and 5.0% in FY28. Inflation is projected at 4.9% in Jul-Sept, 6.0% in Oct-Dec and 5.7% in Jan-Mar, with risks evenly balanced around the baseline. 

 

The report flagged significant upside risks to the inflation outlook from climate and geopolitical shocks. It said the El Nino phenomenon is expected to intensify through end-2026 and remain strong in the first half of 2027, posing risks to agricultural output and reservoir replenishment. Renewed tensions in West Asia could also push up global energy prices, freight, insurance and transportation costs, potentially triggering broader cost-push and second-round inflationary pressures. 

 

Household inflation expectations have also risen. Urban households' three-month ahead and one-year-ahead inflation expectations increased 70 basis points and 60 bps, respectively, to 9.9% and 10.0% in the September survey. Rural and semi-urban households' current inflation perception rose 70 bps to 6.8%, while their one-year-ahead expectation increased 50 bps to 7.9%.

 

The central bank identified prolonged geopolitical tensions, volatility in global financial markets, shifting trade patterns and climate-related shocks as key downside risks to its growth outlook. On the upside, an easing of geopolitical tensions, lower trade uncertainty and a broad-based revival in private investment could support growth above the baseline. 

 

The report also noted that global growth has remained resilient, supported by AI-related investment and fiscal measures, but elevated crude prices, trade friction and the West Asia conflict continue to pose risks. The IMF has projected global growth at 3.0% in 2026 and 3.4% in 2027, while the RBI highlighted tighter global financial conditions and a hawkish stance among major central banks as risks for emerging markets

 

The Reserve Bank of India's Monetary Policy Committee Wednesday raised the policy repo rate for the first time in over three years by 25 basis points to 5.50%. The MPC also decided to change its stance to calibrated tightening.  End

 

US$1 = INR 96.79

 

Reported by Kabir Sharma 

Edited by Akul Nishant Akhoury

 

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