RBI raises FY27 inflation projection to 5.1% amid higher crude oil prices
The RBI has raised its FY27 inflation forecast to 5.1% due to surging crude oil prices and supply chain risks. This adjustment accompanies the first repo rate hike in nearly four years.
Why it matters
Adjusted inflation projections signal that the central bank expects prolonged price volatility, impacting investment strategies and household purchasing power.
The Reserve Bank of India (RBI) on Wednesday (October 7, 2026) marginally raised inflation projection to 5.1% for FY27 from earlier forecast of 5%, Governor Sanjay Malhotra said.
Consumer inflation accelerated in August to 4.82% from a year earlier, above the Reserve Bank of India’s 4% medium-term target for a third consecutive month. Higher prices of fuel and food are now biting the economy with nearly half of the consumer basket seeing inflation above 4%. Inflation is expected to peak around 5.9% in the third quarter, with deficient monsoon conditions and crude oil prices around $100 a barrel adding to the risks.
Follow RBI MPC meeting LIVE updates on October 7, 2026
The RBI raised its benchmark repo rate by 25 basis points to 5.5% fort he first time in nearly four years.
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