RBI revises GDP growth forecast to 7.4% for FY26
What's the story
The Reserve Bank of India (RBI) has revised its GDP growth forecast for the current fiscal year from 7.3% to 7.4%. The revision was announced by RBI Governor Sanjay Malhotra during the first policy review meeting of 2026, held on February 6. The central bank also revised its early outlook for FY27, projecting a real GDP growth of 6.9% in Q1 and 7% in Q2, up from earlier estimates of 6.7% and 6.8%, respectively.
Rate stability
Interest rates unchanged amid global trade uncertainties
Despite global trade uncertainties and financial market volatility, the RBI has decided to keep interest rates unchanged. The decision comes as a response to the resilience of domestic demand. The central bank's revised forecast is a slight upgrade from the 7.3% growth projection made in December, further reinforcing its confidence in India's economic resilience against global challenges.
Upcoming releases
Upcoming changes in GDP and inflation series
The RBI has announced that a new series for GDP and inflation will be released in the coming days. This change could potentially recalibrate key macroeconomic indicators in the future. The central bank also reiterated that domestic growth drivers remain intact, with private consumption expected to maintain its momentum into next year.
Budget impact
Union Budget measures expected to sustain economic momentum
The RBI's growth outlook is also supported by measures announced in the Union Budget. These include higher public spending on infrastructure, manufacturing incentives, and efforts to attract private investment. The central bank expects these steps to sustain economic momentum in the medium term. It has consistently highlighted India's relative insulation from external shocks due to strong domestic demand and a healthier banking system.
Global contrast
India's domestically anchored growth drivers provide resilience
The RBI's optimistic growth outlook stands in stark contrast to an uncertain global backdrop of slowing growth in major economies, geopolitical tensions, and volatile financial conditions. However, the central bank has consistently argued that India's growth drivers are increasingly domestically anchored. This reduces the economy's vulnerability to external shocks. Government estimates broadly align with the RBI's view, predicting a growth rate of 6.8% to 7.2% for the next fiscal year due to resilient demand and continued investment activity.