Mumbai, 06 February (H.S.): The Reserve Bank of India (RBI) elevated its gross domestic product (GDP) growth projections for financial year 2026-27's first and second quarters to 6.9 percent and 7 percent, respectively, on Friday, signaling sustained economic vigor amid global headwinds.

Governor Sanjay Malhotra highlighted expectations of a robust 7.4 percent real GDP expansion for FY 2025-26—dwarfing the prior year's performance—propelled by resilient private consumption and steady investment flows.

During the monetary policy announcement, he affirmed the Indian economy's trajectory on an upward path, attributing revised estimates to free trade agreements, GST rationalization, and buoyant agricultural output; December projections stood at 6.7 percent for Q1 (April-June) and 6.8 percent for Q2 (July-September).

Economic activity should remain robust through FY 2026-27, the Governor projected, with agriculture bolstered by healthy reservoir levels, robust rabi sowing, and improving crop prospects. Manufacturing gains momentum from corporate sector recovery and unorganized segment vitality, while construction sustains strength; robust domestic demand underpins services resilience.

Full-year FY 2026-27 growth guidance awaits the April policy review, incorporating refreshed GDP and Consumer Price Index (CPI) series on base year 2024. On the demand front, private consumption momentum persists, rural demand stabilizes, and urban spending accelerates via GST streamlining and accommodative monetary policy.

Investments flourish through elevated capacity utilization, brisk bank credit expansion, benign financial conditions, and sustained government infrastructure thrust.Recently sealed India-EU Free Trade Agreement (FTA), prospective India-US pact, and ancillary deals promise medium-term export buoyancy, complemented by growth-conducive Budget measures.

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Hindusthan Samachar / Jun Sarkar