RBI Projects FY27 GDP Growth at 6.9% and CPI Inflation at 4.6%, Signals Stable Economic Outlook

The Reserve Bank of India (RBI) has kept the policy repo rate unchanged at 5.25% following the conclusion of first Monetary Policy Committee (MPC) meeting of this financial year (FY) on Wednesday. The 60th MPC meeting was conducted over three days, from April 6 to April 8, under the leadership of RBI Governor Sanjay Malhotra.

RBI MPC Meeting: Repo Rate Steady at 5.25%, Neutral Stance Continues

The committee has retained its "neutral" stance, suggesting that future policy actions will be guided by how inflation and economic growth evolve in the coming months.

RBI Keeps SDF, MSF and Bank Rates Unchanged

Other key policy rates were also left unchanged. The standing deposit facility (SDF) rate remains at 5.00%, while both the marginal standing facility (MSF) rate and the bank rate continue to stand at 5.50%.

More than 92% of participants in a GoodReturns poll expect the RBI to keep interest rates unchanged, citing rising geopolitical tensions and their potential to push inflation higher.

Growth & GDP Forecast: RBI Projects 6.9% GDP Growth for FY27; Estimates Last Year's Growth at 7.6%

Sanjay Malhotra stated that the Iran conflict, particularly around the Strait of Hormuz, had disrupted global supply chains and impacted energy markets as well as overall economic growth.

Real GDP growth for the last year is estimated at 7.6% as per RBI projections, while the central bank has projected growth at 6.9% for FY27.

"The ongoing conflict in West Asia has increased risks to both inflation and growth outlooks due to higher energy prices and supply disruptions. While India's domestic economy remains on a strong footing with resilient demand, the RBI has adopted a cautious approach amid global uncertainties, ensuring adequate liquidity support for credit growth. Updated projections for FY27 GDP growth and CPI inflation are expected to reflect these external pressures," said Santosh Meena, Head of Research at Swastika Investmart.

Inflation Outlook

The Reserve Bank of India (RBI) has projected CPI inflation at 4.6% for FY27.

For the first quarter, inflation is estimated at 4%, while it is projected to rise to 4.4% in the second quarter. In the third quarter, inflation is expected to peak at 5.2%, before easing to 4.7% in the fourth quarter.

Core inflation has been estimated at 4.4%. Notably, this is the first time core inflation estimates have been provided, and going forward, such projections will be included in the RBI's outlook, as per the Governor.

Upside risks to inflation have increased, while the fundamentals of the Indian economy remain on a stronger footing.

"Repo rate remaining unchanged is a welcome move by the RBI MPC. Given the current market volatility and global uncertainty, this decision provides much-needed stability and reinforces confidence in fixed income instruments," said Saurabh Jain, Co-founder & CEO, Stable Money.

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