- RBI Deputy Governor Poonam Gupta expects one rate hike this year amid uncertainties
- Crude oil prices are projected to hover around $90 per barrel in 2026-27
- Improved monsoon and resilient domestic activity have strengthened India’s growth outlook
Reserve Bank of India's Deputy Governor and Monetary Policy Committee member Poonam Gupta expects one rate hike this year amid ongoing global uncertainties and higher oil prices, with crude projected to cost around $90 per barrel.
"The scope for any further easing does not seem to exist at the current juncture. Instead, given that the headline inflation is projected to peak to a level as high as 5.9 per cent in Q3 2026-27, a case for a hike may emerge during the course of the year," Gupta said in the MPC minutes released on Wednesday, August 19
She said that the improving monsoon conditions and resilient domestic activity have strengthened India's growth outlook despite persistent geopolitical tensions.
"As the large deficiency recorded in June narrowed through July, sowing has gained pace, and reservoir levels have risen. In addition, a range of high-frequency indicators continue to display resilience and dynamism, supporting the growth momentum," Gupta said.
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Tensions between US and Iran escalated again in July after a brief pause in June. Despite this, the outlook on the prices and availability of oil and other energy products has improved, she noted.
The real GDP growth for 2026-27 is now projected at 6.7 per cent; while CPI inflation is expected at 5.0 per cent, marking a 10 bps upward revision in growth and 10 bps downward revision in inflation.
In light of the current circumstances, the Deputy Governor called for modest revision in the average oil price for the year. "Based on current assessment of oil price futures, it would be reasonable to expect oil prices to average about $90 per barrel during the year," she said.
Meanwhile, the GDP and inflation forecasts of April policy assumed oil prices to average $85 per barrel, and the June policy assumed it to be $95 per barrel.
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