With a good monsoon and GST rate rationalization, the Reserve Bank of India (RBI) has revised the growth projections for FY26 upwards. The gross domestic product (GDP) growth forecast for FY26 has been raised to 6.8 per cent.
Quarterly estimates are as follows:
- Q2: 7.0% (earlier 6.7%)
- Q3: 6.4% (earlier 6.6%)
- Q4: 6.2% (earlier 6.3%)
For Q1 of FY27, growth is projected at 6.4%, down from 6.6% earlier. The downward revisions for Q3, Q4, and Q1 of FY27 were attributed partly to the 50% tariffs by the US on Indian imports.
RBI Governor Sanjay Malhotra said that while US tariffs will moderate exports, government policy steps may offset some of the impact of global headwinds. He highlighted that structural reforms, many announced by Prime Minister Narendra Modi on 15 August, including the streamlining of GST, are expected to cushion the economy against adverse external factors.
Taking all these factors into account, the governor stated: “Real GDP growth for this year is now projected at 6.8 per cent. This is a revision from our earlier forecast of 6.5 per cent. Q2 now is projected at 7 per cent, Q3 at 6.4 per cent and Q4 at 6.2 per cent. Real GDP growth for Q1 next year is projected at 6.4 per cent. The risks are evenly balanced.”
In the last policy announcement, despite an uncertain global trade environment caused by tariff hikes and trade negotiations, the RBI had kept the GDP growth projection for FY26 unchanged at 6.5%. This has now been revised upward to 6.8%.
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