PTI
Mumbai, Oct 1: The Reserve Bank of India (RBI) on Wednesday revised India’s growth outlook for 2025-26, projecting GDP expansion at 6.8%, while lowering its inflation forecast to 2.6%, citing an above-normal monsoon and the rationalisation of GST rates.
In its August review, the central bank had estimated GDP growth at 6.5% and inflation at 3.1%.
Announcing the bi-monthly monetary policy, RBI Governor Sanjay Malhotra said robust domestic factors amid a shifting global economic environment have reshaped India’s growth-inflation narrative.
“Buoyed by a good monsoon, the Indian economy continues to exhibit strength with higher growth in Q1 2025-26. At the same time, headline inflation has moderated significantly,” Malhotra said.
He added that the recent rationalisation of Goods and Services Tax (GST) rates is expected to temper inflation while also boosting consumption and growth. However, he cautioned that US tariffs could weigh on India’s export performance.
The RBI now projects real GDP growth for FY26 at:
- Q2: 7.0%
- Q3: 6.4%
- Q4: 6.2%
The first quarter of 2026-27 is pegged at 6.4%.
On the inflation front, Malhotra noted that actual outcomes so far have remained well below projections, primarily due to a sharp fall in food inflation supported by improved supply prospects and effective government interventions.
Core inflation has stayed largely contained, recording 4.2% in August, despite continued price pressures in precious metals.
The RBI has placed CPI inflation for FY26 at:
Q4: 4.0%
CPI inflation for Q1 2026-27 is forecast at 4.5%.
Q2: 1.8%
Q3: 1.8%
