{
  "id": 10402657,
  "title": "HSBC expects RBI to raise repo rate by 50 bps in FY27 amid strong growth, inflation pressures",
  "url": "https://urgent.news/2026/09/28/hsbc-expects-rbi-to-raise-repo-rate-by-50-bps-in-fy27-amid-strong",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-28T08:13:16.000Z",
  "source": {
    "name": "The Economic Times - Economy",
    "slug": "the-economic-times-economy",
    "url": "https://economictimes.indiatimes.com/news/economy/policy/hsbc-expects-rbi-to-raise-repo-rate-by-50-bps-in-fy27-amid-strong-growth-inflation-pressures/articleshow/134536430.cms"
  },
  "original_language": "en",
  "account": "India's GDP growth in the second quarter of FY2026-27 significantly exceeded the Reserve Bank of India's (RBI) 7% forecast, prompting HSBC to anticipate a gradual rate-hiking cycle, according to a new report. The RBI is expected to raise the repo rate by 25 basis points twice in FY27, bringing it to 5.75%, as strong economic growth and persisting inflationary pressures are at play. The RBI anticipates inflation to average over 5% over the next three quarters, which could justify gentle rate hikes, the report stated. Furthermore, the RBI is expected to absorb Rs 5-6 trillion of excess liquidity generated by FCNR(B) deposits through measures like open market operation (OMO) sales. Inflation is projected to stay near the RBI's 4% target in the first half of FY27, before rising in the second half. Headline inflation is forecast to exceed 5% over the next nine months, driven by factors such as rebounding Brent oil prices and the potential impact of El Nino conditions. Higher input costs could also be passed on to consumers, pushing core inflation towards 5% by the end of FY27. Strong consumer demand, front-loaded manufacturing activity, and government measures have supported India's economic growth, which is projected to be 7.2% for FY27. However, economic growth is expected to moderate in the coming quarters due to factors like a high base, reduced public capital expenditure, weak sowing, deficient rainfall, and fading GST rate cuts. Additionally, India's current account deficit is expected to widen to 1.3% of GDP in FY27 from 0.6% in FY26, primarily driven by higher oil prices and imports of electronics and other core goods. The government deficit is projected to be 0.5% of GDP higher than the budget estimate due to spending on energy price shock mitigation measures.",
  "summary": "India's GDP growth in the second quarter of FY26 surpassed the Reserve Bank of India's forecast of 7 percent. The growth prompted forecasts of gradual rate hikes, with expectations of a 25 basis points increase twice in FY27. Additionally, inflation is projected to hover above 5 percent due to various economic pressures. Rising oil prices are expected to widen the current account deficit to 1.3…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "FXStreet",
        "title": "GBP: Inflation risks and weak growth outlook – HSBC",
        "url": "https://urgent.news/2026/09/28/gbp-inflation-risks-and-weak-growth-outlook-hsbc",
        "published": "2026-09-28T08:36:52.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}