The Reserve Bank of India’s Monetary Policy Committee (MPC) has projected consumer price inflation (CPI) at 4.6 per cent for the current fiscal year (FY27), even as global uncertainties continue to weigh on the economic outlook.
The projection comes at a time when the global economy is facing unprecedented challenges, including the ongoing conflict in West Asia, a temporary ceasefire announcement, and continued disruptions in global supply chains.
Inflation Trajectory: Quarter-wise Outlook
Providing a detailed inflation path, RBI Governor Sanjay Malhotra outlined the following projections for FY27:
Q1: 4.0 per cent
Q2: 4.4 per cent
Q3: 5.2 per cent
Q4: 4.7 per cent
The trajectory suggests a gradual rise in inflation through the first half of the fiscal year, followed by some moderation towards the end.
Inflation Below Target in Early Months
The governor noted that inflation remained below the target in January and February, indicating a relatively benign start to the year.
However, evolving global conditions and supply-side disruptions could influence price trends going forward.
Global Headwinds Cloud Outlook
The RBI highlighted that the global environment has turned more challenging, with rising geopolitical tensions and supply chain disruptions adding to uncertainty.
Financial markets have also witnessed increased volatility, with equities seeing a broad-based correction.
Domestic Fundamentals Remain Strong
Despite the shifting global backdrop, the central bank emphasised that India’s macroeconomic fundamentals remain on a stronger footing compared to previous crisis episodes and relative to many other economies.
Policy Continuity Amid Uncertainty
Against this backdrop, the MPC unanimously decided to keep the repo rate unchanged, signalling a cautious and data-dependent approach. The decision reflects the need to balance inflation management with growth considerations amid evolving global risks.
The RBI also indicated that the current account deficit is expected to remain moderate and within sustainable levels, supported by robust remittance inflows.
Governor Malhotra stressed that elevated global uncertainties require continuous monitoring and vigilance from policymakers. While inflation remains within manageable levels for now, the RBI’s projections highlight the impact of global developments on domestic price stability.
