RBI MPC June 2026: GDP forecast cut to 6.6% for FY27; Q1 at 6.6%, Q2 at 6.3%, Q3 at 6.5% Q4 at 6.8%

The Reserve Bank of India has revised its FY27 real GDP growth forecast down to 6.6% from its earlier projection of 6.9%, acknowledging that the Iran war-driven energy price shock and global supply disruptions are beginning to weigh on India’s economic momentum.

The quarterly breakdown shows a front-loaded impact, with growth expected to moderate sharply in the first half of the year before recovering in the second half as the supply shock’s effects gradually dissipate.

The Q2 print of 6.3% represents the trough of the projected slowdown, reflecting the maximum pass-through impact of elevated energy costs on consumption, logistics, and manufacturing activity. The recovery to 6.5% in Q3 and 6.8% in Q4 assumes a gradual easing of geopolitical pressures and some normalisation in energy markets, though Governor Malhotra cautioned that considerable risks to the growth outlook remain.

The downward revision of 30 basis points from the earlier 6.9% projection is significant but not alarming in the context of a supply shock of the scale India has absorbed since the Iran war began on February 28. Elevated crude oil prices, four rounds of petrol and diesel hikes in 12 days, a rupee that touched record lows near ₹97 per dollar, and cumulative FPI outflows of ₹2.47 lakh crore have all compressed domestic demand and consumer confidence through the first quarter of FY27.

At 6.6%, India would still remain the fastest-growing major economy in the world, ahead of China’s projected trajectory and comfortably above the global average. The RBI’s confidence that India entered this turbulence with better fundamentals than previous shock episodes underpins the view that the slowdown is cyclical rather than structural.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.