The RBI in its October monetary policy, raised its baseline growth projection from 6.5 per cent to 6.8 per cent. This was no surprise as Q1 GDP came at 7.8 per cent – a full 1.3 percentage points (ppt) higher than its projection. Even if it had retained its projections for the subsequent three quarters the full year projected growth would have been at 6.8 per cent.

RBI also fine-tuned its quarterly growth projections by lifting the Q2 projection by 0.2 ppt, while lowering the next two quarters growth by 0.1 ppt each. This is a small moderation out of higher US tariffs which was assumed to stay at 50 per cent.

These projections imply a slowdown from 7.4 per cent growth in H1 to 6.3 per cent in H2. Much of this slowdown is on account of adverse base effects.

Growth at risk

Growth may be

See Full Page