FY26 GDP growth projection revised upward to 6.8%, says RBI Governor

FY26 GDP growth projections revised upward, says RBI Governor

The Reserve Bank of India on October 1 said the GDP growth projections for the current fiscal year have been revised upward with the FY26 growth pegged at 6.8%.

Unveiling the fourth bi-monthly monetary policy for 2025-26, RBI Governor Sanjay Malhotra said US tariffs will moderate exports and that government policy steps may offset some impact of global headwinds. The monetary policy committee unanimously voted to keep repo rate unchanged at 5.5% and decided to continue with a "neutral" policy stance.

The central bank also raised its growth estimate for the September quarter to 7% from 6.7%.

However, the RBI slashed its growth projections for the remaining quarters of the current fiscal year as well as for April-June of FY27.

The RBI's growth projection for FY26 is in line with that of the finance ministry, which expects GDP to expand in the range of 6.3-6.8% in the current year.

The gross domestic product (GDP) growth forecast for FY26 has been revised upward to 6.8%, with quarterly estimates of 6.4% in Q3 as compared to 6.6% earlier, and 6.2% in Q4 as against 6.3% earlier. Growth for Q1 of the next financial year, FY27, is projected at 6.4% as against 6.6% earlier.

Despite stronger-than-expected economic growth of 7.8% in the April-June quarter from a year earlier, the MPC foresees a slowdown in subsequent quarters, partly due to US tariffs of up to 50% on Indian imports.

RBI maintained a rate pause for the second straight policy meeting, after 100 basis point rate cuts in the first half of 2025.