In its October monetary policy review, the Reserve Bank of India (RBI) increased its Consumer Price Index (CPI) inflation forecast for the fiscal year 2027 to 5.2 percent. Concurrently, the bank raised its projection for real Gross Domestic Product (GDP) growth to 7.1 percent.
RBI Governor Sanjay Malhotra stated that based on available data, inflation and its outlook are not favorable, unlike the situation last year.
The RBI's Monetary Policy Committee (MPC) unanimously raised the repo rate by 25 basis points, bringing it to 5.5 percent from the previous 5.25 percent, and changed its stance to 'Calibrated Tightening.'
Inflation Forecast Increase
Sanjay Malhotra announced that the RBI is raising its CPI inflation forecast for the fiscal year 2027 to 5.2 percent during the October monetary policy review. The quarterly inflation forecasts are as follows: 4.9 percent in the second quarter of fiscal year 2027, 6 percent in the third quarter of fiscal year 2027, 5.7 percent in the fourth quarter of fiscal year 2027, and 5.6 percent in the first quarter of fiscal year 2028.
GDP Growth Forecast Increase
Furthermore, the RBI increased its real GDP growth forecast by 40 basis points, setting it at 7.1 percent. The quarterly growth forecasts are as follows: 7.1 percent for the entire fiscal year 2027, 7.2 percent in the second quarter of fiscal year 2027, 6.9 percent in the third quarter of fiscal year 2027, and 6.8 percent in the fourth quarter of fiscal year 2027.