RBI Inflation, GDP Prediction: The Reserve Bank of India (RBI) on Wednesday (August 6) retained the GDP growth projection at 6.5 per cent for FY2026 and lowered the inflation forecast to 3.1 per cent from 3.7 per cent.RBI Governor Sanjay Malhotra, while unveiling the third bi-monthly monetary policy for FY 2025-26, said that the above normal southwest monsoon, lower inflation, rising capacity utilisation and congenial financial conditions continue to support domestic economic activity.He said that the services sector is expected to remain buoyant, with sustained growth in construction and trade in the coming months."Growth is robust and as per projections, though it is below our aspirations. The uncertainties of tariffs are still evolving. Monetary policy transmission is continuing. The impact of the 100 bps rate cut since February 2025 on the economy is still unfolding," the RBI Governor said.He further said the domestic growth is holding up and is broadly evolving along the lines of assessment even though some high-frequency indicators showed mixed signals in May-June, adding that the rural consumption remains resilient while urban consumption revival, especially discretionary spending, is tepid.Taking all these factors into account, he said that the real GDP growth for 2025-26 is projected at 6.5 per cent, with Q1 at 6.5 per cent, Q2 at 6.7 per cent, Q3 at 6.6 per cent, and Q4 at 6.3 per cent. Real GDP growth for Q1 2026-27 is projected at 6.6 per cent.On inflation, the Governor said Consumer Price Index (CPI) declined for the eighth consecutive month to a 77-month low of 2.1 per cent in June, driven primarily by a sharp decline in food inflation."The inflation outlook for 2025-26 has become more benign than expected in June," he said.The RBI said CPI inflation for 2025-26 is projected at 3.1 per cent with Q2 at 2.1 per cent; Q3 at 3.1 per cent; and Q4 at 4.4 per cent. Retail inflation for Q1 2026-27 is projected at 4.9 per cent.
RBI inflation, GDP prediction FY2026: What Governor Sanjay Malhotra said?
