- RBI raises FY27 real GDP growth forecast to 7.1%
- CPI inflation forecast increased to 5.2% from earlier 5%.
- Repo rate hiked by 25 bps to 5.50 per cent.
The Reserve Bank of India on Wednesday, October 7, revised its real GDP growth forecast for the current fiscal year (FY27), raising it to 7.1 per cent from its earlier prediction of 6.7 per cent. In a post-monetary policy meeting address, RBI Governor Sanjay Malhotra also hiked growth estimates for the second and third quarters.
Meanwhile, the central bank also raised the consumer price index (CPI) based inflation forecast to 5.2 per cent from 5 percent--the earlier projection--, signalling that price pressures are expected to be higher due to global headwinds.
GDP Growth Forecast Revised
- Q2FY27 hiked to 7.2 per cent from 6.4 per cent
- Q3FY27 increased to 6.9 per cent from 6.5 per cent.
- Q4FY27 projection remained at 6.8 per cent.
The full-year estimate of 7.1 per cent for the fiscal year ending March 2027 is 0.4 percentage points higher than the previous estimate.
The Governor noted that private spending contributed to growth in the first quarter. Consumption remained broadly resilient, with continued support from discretionary spending.
Also Read: RBI MPC Raises Repo Rate By 25 Bps To 5.50% In First Hike Since February 2023
Inflation Forecast
- CPI inflation for the whole year is projected at 5.2 per cent, from 5 per cent projected earlier
- Q2 FY27 CPI inflation projection revised to 4.9 per cent from 4.7 per cent.
- Q3 inflation projection is revised to 6 per cent from 5.9 per cent.
- Q4 inflation forecast hiked to 5.7% compared with 5.5% earlier.
Repo Rate Hiked
Meanwhile, RBI MPC hiked the repo rate by 25 bps, taking it to 5.50 per cent in the first increase in the repo rate since February 2023. The governor said that the SDF rate stands adjusted at 5.25 per cent, and the marginal standing facility range and the bank rate are at 5.75 per cent.