RBI MPC Keeps Repo Rate Unchanged At 5.25%, FY27 GDP Growth Seen At 6.9%

The Reserve Bank of India (RBI)-led Monetary Policy Committee (MPC), on Wednesday, 8 April, kept the repo rate unchanged at 5.25%. The MPC, in its first bimonthly policy meeting for FY 2026–27, maintained a neutral policy stance.

The central bank has projected gross domestic product (GDP) growth for FY27 at 6.9%.

What Are The Growth And Inflation Projections?

RBI revised its near-term forecasts downward, lowering the growth estimate for the first quarter of FY27 to 6.8% from the previous 6.9%.

It further reduced the Q2 FY27 forecast to 6.7% from an earlier 7%. Additionally, the central bank expects economic growth to pick up to 7% in Q3 and to 7.2% in Q4.

On the inflation front, the central bank said consumer price index (CPI) inflation for FY27 is projected at 4.6%. It retained its Q1 FY27 inflation forecast at 4.0% but raised the Q2 estimate to 4.4% from 4.2%. For Q3 and Q4, inflation is expected to rise to 5.2% in Q3 and then moderate to 4.7% in the following quarter.

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What Did The RBI Governor Say?

In his MPC policy address, RBI Governor Sanjay Malhotra said that disruptions in the Strait of Hormuz are likely to impact growth this year.

The Governor also said that the agricultural sector's prospects are supported by healthy reservoir levels, while private consumption this year will be aided by discretionary spending.

He noted that the likely emergence of El Niño conditions could pose a risk. However, Malhotra assured that the Central Bank will ensure sufficient liquidity in the banking system to meet the productive requirements of the Indian economy.

Sources:

Mint

News18