RBI Adjusts Growth and Inflation Projections Amid Economic Shifts

The Reserve Bank of India (RBI) on Wednesday adjusted its economic forecasts, increasing the growth estimate for the current fiscal year to 6.8% and lowering the inflation projection to 2.6%. The revisions are influenced by a beneficial monsoon season and GST rate adjustments.

During the bi-monthly monetary policy announcement, RBI Governor Sanjay Malhotra highlighted key domestic changes that have reshaped growth-inflation dynamics amid a changing global economic backdrop. He noted that a good monsoon further bolstered economic growth in the first quarter of 2025-26 while also contributing to a decrease in inflation.

Malhotra emphasized that US tariffs pose challenges to export growth, even as GST rationalization is expected to curb inflation and boost consumption. The projected GDP growth for 2025-26 is set at 6.8%, with sequential quarterly estimates reflecting steady growth. The inflation forecast has been revised downward, highlighting effective supply chain management and falling food prices.

(With inputs from agencies.)