The Reserve Bank of India’s Monetary Policy Committee on Friday raised its inflation forecast for 2026–27 after a three-day policy review that ended with the repo rate unchanged at 5.25 percent. The panel now expects headline CPI inflation in the first and second quarters of FY27 at 4 percent and 4.2 percent, respectively, and has modestly reworked its FY26 projections as well.
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Key Highlights:
- RBI inflation forecast for 2026–27 raised, signalling a softer shift from earlier disinflation hopes.
- Q1 and Q2 FY27 CPI are now projected at 4% and 4.2%; FY26 inflation is pegged at 2.1% with Q4 at 3.2%.
- Precious metals alone are estimated to be adding 60–70 bps to the inflation outlook.
- Policy rate stays at 5.25% with a neutral stance, suggesting a watchful approach to future moves.
Why It Matters:
The updated RBI inflation forecast for 2026–27 will shape expectations for borrowing costs, savings returns and corporate investment over the coming year. A more cautious inflation path could delay rate cuts, influencing loan EMIs, bond yields and market sentiment.
