RBI MPC Minutes: High frequency data show economic growth likely to stay strong in Q2, says Governor Malhotra

RBI MPC Minutes: High frequency data show economic growth likely to stay strong in Q2, says Governor Malhotra

High frequency data show economic growth likely to stay strong in Q2, said Reserve Bank of India Governor Sanjay Malhotra, according to MPC minutes released on October 15.

"External demand is likely to stay lukewarm on trade, tariff woes. Growth looks strong by current reckoning, but outlook softer," added Malhotra.

Benign headline, core CPI outlook gives space to aid growth, he added.

Earlier this month, RBI Monetary Policy Committee decided to keep the key interest rate unchanged.

"Policies of RBI, government should help economic growth going ahead. Tariff-related uncertainties are still evolving," said Malhotra.

He added that MPC avoided rate cut in October as "it will not have desirable impact" despite space for it.

MPC member Ram Singh said case for another rate cut has become stronger since August meet but there has been a pause in October as earlier easing is still working.

"Inflation trajectory looks benign at least for next two quarters. Inflation may top 4% aim in FY27 on unfavourable base, demand boost," said Singh.

Q2 GDP growth is seen holding up amid mixed high-frequency data and low CPI, lower H2 growth view make case for additional rate cut, added Singh.

MPC member Poonam Gupta said India is on its way to attain 6.5-7% growth in FY26, FY27.

"Private capex would've been up if not for adverse global conditions. Inflation outlook is more benign post-GST rate cuts," said Gupta.