RBI meeting minutes show optimism in economic growth, muted inflation print

Reserve Bank of India

The Reserve Bank of India (RBI) said on February 20 that the economic outlook for the Indian economy has improved considerably due to the trade agreements with the United States and the European Union, while adding that measures from the Union Budget 2026-27 have boosted sentiment.

In the monetary policy committee (MPC) meeting minutes released earlier in the day, the central bank said that it estimates gross domestic product for the fiscal year 2026 to be at 7.4 percent, aided by private consumption and fixed investment.

Furthermore, the RBI forecasted growth for the first and second quarters of fiscal year 2027 to be at 6.9 percent and 7 percent respectively, largely due to benign inflation, robust investment activity and higher capital expenditure from the government.

With regards to the near-term outlook for inflation, the meeting minutes showed that food supply prospects will remain bright on the back of healthy agricultural production. Excluding precious metals, underlying inflation would remain muted. The RBI, however, warned that geopolitical risks and volatile energy prices could influence price pressures.

Earlier this month, the RBI had unanimously voted to keep rates steady. The central bank has cut 125 basis points since last year due to signs of benign inflation and stronger economic growth.

While all members voted unanimously to keep rates steady, only one member suggested shifting the central bank’s stance from ‘neutral’ to ‘accommodative’. The minutes showed that any further action on monetary policy will be taken, based on future macroeconomic conditions and outlook based on data from the new series for inflation and GDP.