New Delhi, August 5: The Governor of the Reserve Bank of India (RBI), Sanjay Malhotra, announced on Wednesday that India is expected to maintain a growth rate of 6.7% in the fiscal year 2027, solidifying its position as the world’s fastest-growing economy.
The growth rate estimate released during the August Monetary Policy Committee (MPC) meeting is an increase of 10 basis points from the previous forecast of 6.6%.
Malhotra noted that the pressure on the supply side has somewhat eased due to ongoing conflicts in West Asia since June 2026.
However, the resurgence of conflicts in the first week of July has led to increased volatility in energy prices and renewed uncertainty regarding supply chains.
Despite persistent global uncertainties, domestic economic activities have remained robust, as indicated by high-frequency indicators from the first quarter.
The RBI Governor also highlighted that preliminary corporate results from the first quarter suggest strong performance in the manufacturing sector.
According to Malhotra, the headline inflation rate is expected to rise, primarily due to pressures related to food and fuel supply, while core inflation remains stable and is anticipated to decrease after peaking in the third quarter.
He emphasized that future conditions remain unclear amid the southwest monsoon, El Niño, geopolitical instability, and uncertainties in global trade policy. He further stated that any policy-related actions should wait for greater clarity on inflation trends and its components.
Regarding the growth rate, Malhotra attributed the economic support to strong domestic demand, continuous expansion in manufacturing and service activities, and robust exports.
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