RBI MPC outcome: Central bank pegs FY27 GDP growth at 6.9%; inflation seen at 4.6%

RBI MPC outcome: The Reserve Bank of India (RBI) pegged the growth outlook for the new financial year 2026-27 (FY27) at 6.9% during the announcement of the April monetary policy committee meeting's (MPC) outcome on Wednesday, April 8, while it lowered the outlook for the first half of the fiscal.

The figure was lower than 7.6% real GDP growth recorded in FY26.

At the same time, RBI Governor Sanjay Malhotra pegged the inflation for the full financial year at 4.6%. He said that headline inflation remains contained and below the target. “However, upside risks to the inflation outlook driven by increased energy prices, pressures, and probable weather disturbances affecting food prices have increased.”

Announcing the first bi-monthly monetary policy for the current fiscal, the RBI MPC unanimously decided to retain the short-term lending rate or repo rate at 5.25% with a neutral stance amid hopes of a global recovery on the back of the ceasefire in the six-week-long US/Israel-Iran conflict.

Growth outlook for H1FY27 cut marginally

Since the last policy meeting, geopolitical uncertainties have risen, the RBI governor said while announcing the policy decision. High frequency indicators suggest growth momentum remains robust, but the war in the Middle East is likely to impact this momentum, the governor said.

Against this backdrop, he lowered the growth projections for Q1 and Q2 of the ongoing fiscal year to 6.9% and 6.8%, respectively. In the last MPC meeting, the central bank projected India’s economic growth for the first two quarters of FY27 at 6.9% and 7%, respectively.

Meanwhile, the growth is expected to pick up in the second half of the year, with Q3 outlook pegged at 7% and Q4 at 7.2%.

Inflation below target for FY27

For the new fiscal year, the CPI inflation is projected at 4.6%, with quarterly estimates of 4.0% in Q1and 4.4% in Q2. While the projection for Q1 remains the same, it has been revised marginally upwards for Q2 from 4.2% earlier.

The inflation is seen rising to 5.2% in Q3 before easing to 4.7% in Q4. Core inflation is projected at 4.4%. The central bank noted that this marks the first time such a detailed breakdown has been presented, reflecting demand from certain stakeholders.

“The MPC noted that the intensity and the duration of the conflict in West Asia and the resultant damage to the energy and other infrastructure add risk to the inflation and growth outlooks. However, the fundamentals of the Indian economy are on a stronger footing, providing it with greater resilience to withstand shocks now than in the past,” Malhotra said.

The minutes of the MPC’s meeting will be published on April 22, 2026, while the next meeting is scheduled for June 3 to 5, 2026.