RBI Raises FY26 Inflation Projection to 4.6% Amid Geopolitical Tensions

Q: What is the new inflation forecast for FY27?

The new inflation forecast for FY27 is **4.6%**.

Original: RBI Inflation 2026–27: Sanjay Malhotra & Co raises FY26 inflation projection to 4.6%

The Economic Times•Apr 8, 20262 min

In a Nutshell

The Reserve Bank of India (RBI) has increased its inflation forecast for the fiscal year 2026-27 to 4.6%, with quarterly estimates ranging from 4.0% to 5.2%. The RBI also maintained its benchmark repo rate at 5.25%, balancing economic growth with external pressures from geopolitical events.

Key Points

01RBI projects FY27 inflation at 4.6%, up from previous estimates.
02Quarterly inflation estimates are 4.0%, 4.4%, 5.2%, and 4.7%.
03Core inflation is expected to be 4.4%.
04The benchmark repo rate remains unchanged at 5.25%.
05GDP growth is projected to slow to 6.9% in FY27.

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Full Summary

The Reserve Bank of India (RBI) has revised its inflation forecast for the fiscal year 2026-27 to 4.6%, reflecting a detailed quarterly breakdown for the first time. The quarterly estimates are 4.0% for Q1, 4.4% for Q2, 5.2% for Q3, and easing to 4.7% in Q4. Core inflation is projected at 4.4%. This adjustment is significant compared to the previous projections of 4% for Q1 and 4.2% for Q2 made in February. The RBI also decided to keep the benchmark repo rate steady at 5.25%, amidst pressures from a weaker rupee and geopolitical tensions, particularly related to the ongoing Iran war. The central bank has maintained its real GDP growth estimate at 7.6% for FY26 but anticipates a slowdown to 6.9% in FY27, with quarterly growth rates moderating to 6.8% in Q1 and 6.7% in Q2 and Q3, influenced by rising oil prices and global uncertainties.