The Reserve Bank of India (RBI).
Credit: Reuters File Photo
New Delhi: The Reserve Bank of India (RBI) on Friday raised its projection on India's GDP growth for the current financial year to 7.3 per cent from its earlier estimate of 6.8 per cent after the first half numbers substantially exceeded the targets.
The central bank has pegged the October-December quarter growth at 7 per cent, while in the January-March it is likely to decelerate to 6.5 per cent.
India’s gross domestic product (GDP) expanded by 7.8 per cent and 8.2 per cent in Q1 and Q2, respectively. The average growth in the first half of the year stands at 8 per cent.
In its bi-monthly monetary policy review the central bank has given projections for the first two quarters of 2026-27. In the April-June 2026 quarter the GDP is projected to expand at 6.7 per cent, while it is estimated to rise marginally to 6.8 per cent in Q2 of 2026-27.
On inflation, the RBI has lowered its projection from 2.6 per cent to 2 per cent. The Consumer Price Index based retail inflation is projected at 0.6 per cent in October-December quarter and it may rise to 2.9 per cent in January-March period. It is expected to rise to 3.9 per cent in April-June 2026 quarter and to 4 per cent in the second quarter of 2026-27.
“Looking ahead, domestic factors such as healthy agricultural prospects, continued impact of GST rationalisation, benign inflation, healthy balance sheets of corporates and financial institutions and congenial monetary and financial conditions should continue to support economic activity. Continuing reform initiatives would further facilitate growth,” said RBI Governor Sanjay Malhotra.
Reacting on the rupee slump, Malhotra said the exchange rates are determined by the market forces and the RBI does not target any level.
The India rupee fell below 90 against a dollar for the first time this week. It closed at 89.98 on Friday.
“Our stated policy has always been that we allow the markets to determine. I mean we don't target price levels or any bands. We allow the markets to determine prices,” Malhotra said at a press conference after the Monetary Policy Committee meeting.