India, April 9 -- The Reserve Bank of India's (RBI) projections for growth and inflation suggest that the Indian economy, thanks to the war in West Asia, has gone from a Goldilocks - low-inflation and high-growth - environment towards potential stagflation - high-inflation and low-growth.

RBI now expects the Indian economy to grow at 6.9% in 2026-27 with risks tilted to the downside. In the current GDP series, which has annual GDP growth data till 2023-24, this is the lowest and the first sub-7% growth. Inflation projection for 2026-27 now stands at 4.6% and inflation risks for 2026-27, according to RBI, are tilted to the upside.

With the situation still fluid - it remains to be seen whether the two-week ceasefire in the US-Israel war o...