The RBI’s outlook for growth remains steady, projecting an average growth rate of 6.5% for FY26, with quarterly estimates closely aligning with this figure.
While the RBI’s expression of optimism regarding growth is derived from factors such as a strong monsoon season, increasing capacity utilization, and supportive monetary, regulatory, and fiscal policies, the decision to ease monetary policy and provide excess liquidity is primarily influenced by the current inflation situation. Inflation is projected to average lower at 3.1% in FY26, with an upward trend anticipated at 4.4%.
