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RBI lowers FY27 GDP forecast to 6.6 pc on concerns over West Asia conflict
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....BI lowers FY27 GDP forecast to 6.6 pc on concerns over West Asia conflict<BR>FEMA / RBI<BR>Dated:- 5-6-2026<BR>PTI<BR>Mumbai, Jun 5 (PTI) The Reserve Bank on Friday lowered its GDP forecast for FY2026-27 to 6.6 per cent from the 6.9 per cent estimated in April, citing elevated energy and other commodity prices as well as continued supply disruptions arising from the conflict in West Asia, which ar....
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....e likely to weigh on economic activity. The central bank also said that prolonged global supply-chain disruptions, heightened volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook. Announcing the June bi-monthly monetary policy, RBI Governor Sanjay Malhotra said several high-frequency indicators suggest that domest....
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....ic economic activity has remained largely steady since the outbreak of the conflict. India's manufacturing and services PMI suggest that both sectors continue to be resilient, and business expectations are still positive, he said. On the demand side, private consumption has remained resilient so far. Fixed investment has also maintained its momentum despite rising cost pressures. Merc....
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....handise exports recorded strong growth in April 2026, notwithstanding elevated freight and insurance costs. Services exports are also holding up well, reflecting sustained demand despite concerns about AI. Overall, the economic situation has broadly exhibited resilience and withstood the conflict spillovers, although the impact of rising cost pressures is becoming visible, Malhotra said. ....
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.... "Going ahead, the rise in prices of energy and other inputs, coupled with supply disruptions, is likely to weigh on economic activity. While import diversification in affected commodities is likely to improve supply, it would come at a higher cost," he said. The Governor further said that the full impact, however, will depend on the duration of the conflict, time taken for normalisation of ....
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....supply chains and the burden-sharing approach among the stakeholders. While weak global demand and high logistics costs are headwinds for merchandise exports, services exports are expected to sustain their momentum as demand for Indian services remains healthy, he added. "Taking all these factors into consideration, real GDP growth for 2026-27 is projected at 6.6 per cent, with Q1 at 6.6 p....
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....er cent; Q2 at 6.3 per cent; Q3 at 6.5 per cent; and Q4 at 6.8 per cent," Malhotra said. On global economy, the Governor said the outlook remains clouded by the continuing geopolitical impasse in West Asia, as sharply escalating energy prices and global supply chain disruptions continue to hinder economic activity. Risk-off sentiments and safe-haven demand are imparting volatility to forex....
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.... markets, with a depreciating trend across many Emerging Market Economy (EME) currencies, he added. PTI NKD NKD DR DR =============<BR> News - Press release - PIB....