RBI Monetary Policy: The central bank has also lowered FY26 consumer price index or CPI inflation projection to 4 per cent from 4.2 per cent projected earlier.
The Reserve Bank of India (RBI) on Wednesday downgraded the GDP growth projection for FY26 to 6.5 per cent from the earlier estimate of 6.7 per cent.
“RBI lowers GDP growth projection for FY26 to 6.5 per cent from earlier estimate of 6.7 per cent,” RBI Governor Sanjay Malhotra said after the Monetary Policy Meeting (MPC).
“Real GDP is now projected for this fiscal year at 6.5 per cent in the first quarter, 6.7 per cent in the second quarter, 6.6 per cent in the third quarter and 6.3 per cent in the fourth quarter,” he added.
The Governor highlighted that this growth projection comes after a strong performance of 9.2 per cent growth recorded in the previous financial year, 2024-25, as per figures released by the Ministry of Statistics and Programme Implementation (MOSPI).
The central bank has also lowered FY26 consumer price index or CPI inflation projection to 4 per cent from 4.2 per cent projected earlier.
“CPI inflation in Q1 is expected to be at 3.6 per cent, Q2 at 3.9 pr cent, Q3 at 3.8 per cent and q$ slightly higher at 4.4 per cent and the risks are evenly balanced,” Malhotra said.
Speaking on the outlook for the economy, Malhotra said the agriculture sector is expected to perform well this year due to healthy reservoir levels and strong crop production.
Malhotra said that investment activity has gathered momentum and is expected to improve further. This improvement is being driven by sustained and higher-capacity utilization, continued government spending on infrastructure, strong balance sheets of banks and corporates, and easier financial conditions. He said
“Investment activity has gained traction and is expected to improve further on the back of sustained, higher-capacity utilization, government’s continued trust on infrastructure spending, healthy balance sheets of banks as well as the corporates, along with the easing of financial conditions”.
