RBI GDP growth 2025: Central bank keeps FY26 forecast unchanged at 6.5%, projects 6.6% for FY27

The Reserve Bank of India’s Monetary Policy Committee (MPC) on Wednesday kept its GDP growth forecast for FY2025-26 unchanged at 6.5%, sticking to its earlier assessment despite fresh uncertainty triggered by US President Donald Trump’s new tariff measures.The RBI’s Monetary Policy Committee left the repo rate unchanged at 5.5%, with core inflation holding steady near the 4% mark.The three-day MPC meeting, which began Monday, took place amid renewed concerns over global trade tensions and the potential impact on Indian exports, following Washington’s move to impose a 25% import duty on Indian goods effective August 7.Since February 2025, the RBI has reduced the benchmark repo rate by 100 basis points, bringing it down to 5.5%. With inflation staying below the 4% target and external headwinds building, attention is now focused on the central bank’s forward guidance.At this point, markets are less preoccupied with further rate cuts and more tuned in to the RBI’s tone and strategy, especially as capital flows remain volatile and trade relationships continue to shift.The RBI’s July Bulletin in July had noted that India’s economic activity remained resilient during June and July despite geopolitical friction and tariff concerns.The 'State of the Economy' article in the Bulletin pointed to encouraging signs: improving prospects for the kharif crop, continued strength in services, and modest growth in industrial output. Headline CPI inflation stayed below 4% for a fifth straight month in June, mainly due to deflation in food prices.System liquidity remained in surplus, helping transmit policy rate cuts more efficiently into credit markets. The external sector also showed strength, supported by solid forex reserves and a manageable external debt-to-GDP ratio.The Bulletin flagged that a 10% increase in global crude prices could push up headline inflation by about 20 basis points. It emphasised the need to curb the inflationary impact of high import dependence and called for a gradual shift to alternative fuel sources for better long-term price stability.It also noted that household inflation expectations tend to run systematically higher than those of professionals or businesses, even during periods of stable or falling prices.