- The Monetary Policy Committee (MPC) met on the 3rd, 4th and 5th of June to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25 per cent; consequently, the standing deposit facility (SDF) rate remains at 5.00 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.50 per cent. The MPC also decided to continue with the neutral stance.
- The Second Advance Estimates released by the National Statistical Office (NSO) placed India’s real GDP growth at 7.6 per cent in 2025-26, owing to strong expansion in private consumption and fixed investment.
- Real GDP growth for 2026-27 is projected at 6.6 per cent, with Q1 at 6.6 per cent; Q2 at 6.3 per cent; Q3 at 6.5 per cent; and Q4 at 6.8 per cent. Prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook.
- CPI inflation for 2026-27 is projected to be at 5.1 per cent with Q1 at 4.2 per cent; Q2 at 5.1 per cent; Q3 at 5.9 per cent; and Q4 at 5.4 per cent. Core inflation is projected at 4.7 per cent for 2026-27. These forecasts are subject to upside risks due to global supply chain disruptions, global commodity price shocks, uncertainty about the spatial and temporal distribution of the south-west monsoon and El Niño conditions.
Summary:
- Policy Repo Rate remains unchanged at 5.25%
- Marginal Standing Facility (MSF) & Bank Rate remains at 5.50%
- Standing Deposit Facility (SDF) remains at 5.00%
- Real GDP growth for 2026-27 is projected at 6.6%
- CPI Inflation for 2026-27 is projected at 5.1%