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2026-04-07 10:08:23
[Citi Research: RBI May Lower GDP Growth Forecast Amid Middle East Conflict] (1) Citi Research stated in a report that the Reserve Bank of India (RBI) may lower its GDP growth forecast for fiscal year 2026/27 and raise its inflation expectations due to the impact of the Middle East conflict. (2) Citi pointed out that given the controlled inflation trajectory and the uncertainty of growth, the RBI is likely to keep the policy repo rate unchanged at 5.25% at its policy meeting on Wednesday. (3) Compared to the early stages of the Russia-Ukraine conflict, the current starting point for overall and core inflation is more benign. Citi calculations show that even if the oil price shock leads to a significant price increase, it will hardly threaten the central bank's 6% inflation ceiling. In addition, the current repo rate of 5.25% is much higher than the effective interest rate of 3.35% at the beginning of the Russia-Ukraine conflict.
