The RBI has delivered upbeat news for India’s growth trajectory, hiking its FY26 real GDP estimate to 7.6 percent amid a complex global landscape. Governor Sanjay Malhotra, in the post-MPC briefing, tempered enthusiasm with warnings about geopolitical risks, particularly those impacting energy markets.
This positive revision is fueled by stellar contributions from services, manufacturing growth, and resilient household consumption. It’s a testament to India’s ability to navigate uncertainties with domestic vigor.
For FY27, expectations cool to 6.9 percent overall, with Q1 trimmed to 6.8 percent and Q2 to 6.7 percent. The adjustments stem from mounting international pressures, including war-related disruptions in key regions like Iran, which are stoking energy price volatility.
‘Sharp increases in energy costs heighten inflation risks, potentially curbing global economic expansion,’ Malhotra emphasized. The December quarter of FY26 clocked 7.8 percent growth, down slightly from 8.4 percent previously, but still robust.
Optimism persists around private capex, as industry capacity utilization holds firm. Food prices are expected to remain stable, aiding overall price management. CPI inflation for FY27 is pegged at 4.6 percent, detailed quarterly as 4% (Q1), 4.4% (Q2), 5.2% (Q3), and 4.7% (Q4).
Liquidity support from RBI will ensure smooth credit flow, while forex reserves hit a healthy $697.1 billion by early April. Net FDI has improved year-on-year, with India shining as a prime destination for greenfield projects, setting the stage for enduring economic expansion.
