The Reserve Bank of India (RBI) has forecasted India’s real GDP growth for 2026-27 at 6.6%, with individual quarters at 6.6%, 6.3%, 6.5%, and 6.8% respectively. RBI Governor Sanjay Malhotra highlighted that global supply chain disruptions, financial market volatility, and weather-related shocks pose risks to domestic growth. Despite challenges, India’s manufacturing and services sectors show resilience, with positive business expectations.
Private consumption, supported by discretionary spending, remains strong, while fixed investments continue despite cost pressures. Merchandise exports saw robust growth in April 2026, despite high freight and insurance costs. Services exports are also performing well, reflecting sustained demand despite concerns about artificial intelligence.
RBI Governor Malhotra noted that while CPI inflation remains below target levels, the impact of global shocks on domestic prices has been limited. Baseline projections indicate a potential increase in headline inflation towards the upper tolerance level in Q3 2026-27, with expectations of easing in Q4. However, the risk of inflation generalization through second-round effects on expectations and wages requires close monitoring.
The Central Bank projects CPI inflation for 2026-27 at 5.1%, distributed across quarters at 4.2%, 5.1%, 5.9%, and 5.4% respectively. Core inflation is estimated at 4.7% for the same period, with forecasts subject to upside risks from global disruptions, commodity price shocks, and weather uncertainties. Despite challenges, adequate food grain stocks and satisfactory reservoir levels offer some reassurance.
