RBI Increases India's GDP Growth Forecast Amid Global Challenges
RBI Adjusts GDP Growth Projections
File image of crowd gathered at The India Gate in New Delhi (Photo: X)
Mumbai, Oct 7: The Reserve Bank of India (RBI) has revised its GDP growth forecast for the current fiscal year, increasing it by 40 basis points to 7.1%. This adjustment is attributed to the robust performance of the domestic economy, although the RBI has warned that ongoing global geopolitical tensions could impact this outlook.
During the announcement of the October bi-monthly monetary policy, RBI Governor Sanjay Malhotra highlighted that the Indian economy has shown resilience in the face of global challenges, with real GDP growth recorded at 7.8% for the first quarter of 2026-27.
Malhotra noted that the growth has been bolstered by strong private consumption and investment, along with a positive contribution from net exports.
He stated, "Considering all these factors, the real GDP growth for 2026-27 is now projected at 7.1%; with Q2 at 7.2%; Q3 at 6.9%; and Q4 at 6.8%."
This latest forecast reflects an upward revision from the RBI's previous estimates and indicates the sustained strength of economic activity despite external pressures.
The central bank has also forecasted a GDP growth of 7.1% for the first quarter of 2027-28, with risks to this forecast being evenly balanced.
However, Malhotra cautioned that prolonged geopolitical tensions, high international commodity prices, disruptions in global trade, and tighter financial conditions could exert pressure on the growth outlook.
He emphasized that these global challenges might hinder India's economic growth in the future.
The RBI's updated projections align with similar upward revisions from various international organizations.
The World Bank has also increased its GDP growth forecast for India for the current fiscal year to 7.1%, marking a 0.5 percentage point rise from its April estimate, driven by strong domestic demand and exports despite global challenges.
Recently, the Asian Development Bank (ADB), Organisation for Economic Cooperation and Development (OECD), S&P, and Fitch have also raised their growth forecasts for India for FY27 to approximately 7%, citing robust economic activity and resilient domestic demand.
The OECD has specifically raised its FY27 GDP growth forecast for India by 80 basis points to 7.1%.