The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.50%, a one-year high, the first hike since 2023. Retail inflation reached 4.8% in August, the tenth consecutive monthly increase, surpassing the central bank’s 4% target. HSBC and Goldman Sachs expect another rate hike in December. The World Bank projects India’s economic growth to slow to 7.1% in the fiscal year ending March 2027 from 7.8% previously. The country faces energy supply risks with 85% of its fuel needs met via imports through the Strait of Hormuz, as well as an El Niño episode that caused the fourth-driest June-August period since 1960.
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