India RBI projects 6.9% growth, geopolitical, monsoon risks

India’s economy is projected to grow at 6.9 percent in the current fiscal year, supported by robust domestic demand and strong macroeconomic fundamentals, according to the Reserve Bank of India’s latest annual report. The central bank cautioned, however, that persistent geopolitical tensions, volatile energy prices, and uncertain monsoon conditions pose significant risks to both growth and inflation.

The report, released on May 29, 2026, states that India remained the world’s fastest-growing major economy in the 2025-26 fiscal year, expanding at 7.6 percent. Growth was driven by strong private consumption, sustained public investment in infrastructure, and sound policy fundamentals. Officials highlighted that healthy corporate and banking sector balance sheets, alongside continued government capital expenditure, are expected to sustain investment momentum.

Nevertheless, the outlook is clouded by external challenges. The RBI identified the conflict in West Asia, which escalated in late February 2026, as a dominant drag on the global recovery, disrupting energy markets and supply chains. Brent crude oil prices averaged $120.4 a barrel in April, though they eased somewhat in May....