Kotak MF projects a FY27 balance-of-payments surplus — and a 50 bps rate hike

Kotak Mutual Fund's latest macroeconomic report projects that India will post a balance-of-payments surplus in FY27, while simultaneously forecasting a 50 basis-point RBI rate hike in the second half of the year.

The report cites a surge in capital inflows — gross FDI rose to $30.7 billion in Q1 FY27 from $26.7 billion a year earlier, paired with over $28 billion in FCNR deposit inflows. It also revised the FY27 GDP growth forecast up to 6.7%, citing resilient domestic manufacturing and services.

On inflation, Kotak sees FY27 headline easing to 5.0% but Q1 FY28 ticking up toward 5.3% — the rationale for a possible 50 bps hike in the second half.