India's Economy Grows 7.8% in Q1 as RBI Lifts Inflation View to 5.1%
Updated
Updated · CNBC · Jun 5
India's Economy Grows 7.8% in Q1 as RBI Lifts Inflation View to 5.1%
3 articles · Updated · CNBC · Jun 5
Summary
7.8% GDP growth in the January-March quarter beat a 7.2% Reuters forecast, matching the prior quarter despite disruptions from the Middle East conflict late in the period.
Trade gains helped early in the quarter: India sealed an EU deal and won U.S. tariff cuts from 50% to 18%, later reduced to 10% after the Supreme Court voided Trump's tariffs.
The Iran war has since become a major risk, disrupting energy supplies, swelling India's import bill and adding pressure on the rupee amid record foreign investor outflows.
5.1% is now the RBI's inflation forecast for the year ending March 2027, up 50 basis points, while its growth view was cut to 6.6% from 6.9% and policy turned "cautious."
Fuel price pass-through in May and possible El Nino-driven crop shortages threaten to push inflation higher even though April inflation remained below the RBI's 4% target.