Kolkata: The Reserve Bank of India has lowered its GDP growth projections for the first and second quarters of the fiscal 2025-2026 amid the concerns over the protectionist trade policies by US president Donald Trump.

The central bank has projected the first quarter gross domestic product (GDP) growth at 6.7%, two basis points lower than an earlier projection of 6.9%. Similarly, it has revised the second quarter GDP growth outlook at 7% from 7.3% made in the previous policy review.

Overall GDP growth for the fiscal 2025-2026 is projected at 6.7%. This is projected for the first time.

"Headwinds from geo-political tensions, protectionist trade policies, volatility in international commodity prices and financial market uncertainties, continue
to pose downside risks to the outlook," Governor Sanjay Malhotra said.

On the domestic front, the governor has exuded confidence on robust household consumption, buoyed by the tax exemptions announced by finance minister Nirmala Sitharaman.

Malhotra said fixed investment is expected to recover, supported
by higher capacity utilisation levels, healthy balance sheets of financial institutions and corporates, and the government’s continued emphasis on capital expenditure.

"Resilient services exports will continue to support growth," he said

GDP growth for both the third and fourth quarter of next fiscal is projected at 6.5%.

On inflation, RBI expects the Consumer Price Index to moderate to 4.2% in the next fiscal from the projected 4.8% for this fiscal.