RBI projects GDP growth at 6.7 pc for FY27 as India remains fastest-growing economy
New Delhi, Aug 5
Terming India as the fastest-growing economy amid persistent global uncertainties, the Reserve Bank of India on Wednesday projected real GDP growth at 6.7 per cent for FY27, 10 bps higher than its previous projection of 6.6 per cent in the prevision Monetary Policy Committee meeting.
In his address, RBI Governor Sanjay Malhotra pegged Q1 FY27 GDP growth at 7 per cent, Q2 at 6.4 per cent, Q3 at 6.5 per cent, and Q4 at 6.8 per cent.
He said that supply-side pressures from the West Asia conflict have eased somewhat since June 2026.
However, the re-escalation of the conflict since the first week of July has amplified volatility in energy prices and renewed uncertainty around supply chains.
Amid persistent global uncertainty, domestic economic activity has remained resilient, as reflected in high-frequency indicators for Q1. Early corporate results for Q1 also indicate healthy performance in the manufacturing sector, said Malhotra.
Malhotra said headline inflation is projected to increase, primarily due to supply-side pressures from food and fuel, while core inflation remains moderate and is expected to decline after peaking in Q3.
He said the outlook remains hazy amid uncertainties around the Southwest monsoon, El Nino, geopolitics and global trade policy. He added that greater clarity is needed on the inflation trajectory and its composition before taking any policy action.
Malhotra further stated that underlying inflation, as reflected by core inflation excluding precious metals, has remained benign for some time and is expected to align with core inflation towards the end of the financial year.
On growth, Malhotra said the economy continues to be supported by resilient domestic demand, sustained expansion in manufacturing and services activity, and robust exports.
— IANS
Reader Comments
I'm a small business owner in Pune, and honestly, demand has been steady. The manufacturing sector results matching the RBI's optimism is a good sign. But with the uncertainty around El Nino, the government needs to ramp up procurement. Let's hope the monsoon doesn't play spoilsport. 🤞
RBI pegging Q1 at 7% sounds a bit aggressive, but given the strong IIP numbers and service exports, maybe they're onto something. The dip to 6.4% in Q2 makes sense if oil prices spike due to the West Asia mess. Anyway, we're still the fastest-growing major economy, that's what matters on the global stage.
As an investor looking at emerging markets, India's resilience is remarkable. The RBI's 10 bps upward revision confirms the momentum. However, I wish the MPC would get more clarity on the inflation composition as the governor mentioned. Food prices are always the wildcard. Big picture though, India remains a bright spot.
The RBI's optimistic growth view is nice, but bottom-line for us middle-class folks is monthly budget. Core inflation benign? Tell that to my vegetable vendor! 😅 Hope the MPC keeps a close eye on food prices while balancing growth. The West Asia conflict is a big IF, but our domestic demand is strong. Let's see.
I remember when the RBI used to be super conservative about projections. Now they're revising upwards confidently because the fundamentals are strong. The manufacturing push under 'Make in India' is clearly paying off. My only concern is the government spending on infrastructure needs to continue post-election. PSU stocks are
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.