RBI ups real GDP, CPI inflation forecasts for FY27 amid repo rate hike
BusinessLine 2 hrs ago·7 Oct 2026, 1:38 pm
The Reserve Bank of India has revised its growth and inflation forecasts for the fiscal year 2026-27. The central bank now expects real GDP growth to reach 7.2%, up from its previous estimate of 7.0%. It has also raised its Consumer Price Index (CPI) inflation projection to 5.2% for FY27, up from 5.0%. These adjustments come alongside a decision to increase the repo rate, signaling a tighter monetary policy stance.
For investors, this signals a shift towards a more cautious economic outlook. While the higher growth forecast is positive, the simultaneous rise in inflation suggests the central bank is prioritizing price stability. This environment typically leads to higher borrowing costs, which can dampen corporate profits and dampen investor sentiment in the broader market.
Moving forward, investors should monitor the RBI's future policy statements for clarity on the duration of the rate hike cycle. The focus will be on whether the higher inflation forecast remains temporary or becomes a persistent challenge, as this will dictate the trajectory of market liquidity and valuations.
Excerpt from BusinessLine
The Reserve Bank of India has revised upwards its real GDP growth projection for FY27 to 7.10 per cent from the earlier 6.70 per cent, as the economy is expected to remain resilient even as it hiked the repo rate by 25 basis points to 5.50 per cent. It also raised its CPI inflation projection for FY27 to 5.2 per cent…Read the original at BusinessLine
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