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India Macroeconomic Indices

1 Finance Macroeconomic Index

Index providing insights into India’s economic phases and growth outlook. The 1 Finance Macroeconomic Index determines the growth of the economy.

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Subindices

Comprehensive real-time indices tracking India’s economic trends and performance.

Services Sector Activity Index

Services Sector Activity Index

Tracks India’s services sector growth and employment trends.

Industrial Sector Performance Index

Industrial Sector Performance Index

Output and performance of industries involved in manufacturing, production, and related activities.

Agriculture Output Index

Agriculture Output Index

Monitors India’s agricultural production and growth.

Consumer Inflation Index

Consumer Inflation Index

Tracks and provides a timely insight into India’s CPI trends.

Equity Market Optimism Index

Equity Market Optimism Index

Gauge Indian equity market sentiments and investor confidence.

Global Economic Impact Index

Global Economic Impact Index

Assesses the impact of global influences on India.

Financial Sector Soundness Index

Financial Sector Soundness Index

Evaluates banking stability and financial health.

Interest Rate Outlook Index

Interest Rate Outlook Index

Monitors repo rate trends to understand economic phases and monetary policy stance.

Economic Indicators

Economic Indicators

A comprehensive snapshot of India’s key economic indicators, including sectoral performance, inflation, interest rates, equity market optimism, financial sector soundness and global impact metrics. This section offers contextual insights into the country’s economic health and trajectory, helping inform data-driven investment decisions.

India's Economic Dashboard

An overview of India's Economy

High-Frequency Economic Indicators

An extensive collection of high-frequency economic indicators

Services Sector ActivityIndustrial Sector PerformanceAgriculture OutputConsumer InflationEquity Market OptimismFinancial Sector SoundnessGlobal Economic ImpactInterest Rate OutlookOther HFIsKey Economic Indicators
Global Market P/E
Reports and Resources
Asset Allocator
1 Finance Macroeconomic Index

Subindices

Services Sector Activity IndexIndustrial Sector Performance IndexAgriculture Output IndexConsumer Inflation IndexEquity Market Optimism IndexGlobal Economic Impact IndexFinancial Sector Soundness IndexInterest Rate Outlook Index

Economic Indicators

India’s Economic DashboardHigh-Frequency Economic Indicators
Global Market P/E

Reports and Resources

BlogsMonthly UpdatesQuarterly UpdatesWhite PapersAnnual Reports
Asset Allocator
Subindices

Interest Rate Outlook Index

Interest Rate Outlook Index

Interest Rate Outlook Index

Current Phase

Balancing Interest Rate

Index Value: 50.04

74% Success rate

Summary

This phase reflects a period where RBI adjusts interest rates with the objective of managing inflation, and supporting sustainable growth. This could be either through adjusting policy repo rate or using various liquidity management tools. This balancing phase often signals a transition in the economic cycle for instance, moving from a period of strong recovery to a temporary slowdown phase or a more stable growth.

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Index Value (LHS)

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Current Phase

Balancing Interest Rate

Index Value: 50.04

74% Success rate

Summary

This phase reflects a period where RBI adjusts interest rates with the objective of managing inflation, and supporting sustainable growth. This could be either through adjusting policy repo rate or using various liquidity management tools. This balancing phase often signals a transition in the economic cycle for instance, moving from a period of strong recovery to a temporary slowdown phase or a more stable growth.

Interest Rate Outlook Index

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Showing: Index Value • Range: 10 Years

Index Value (LHS)

Last Updated: 31 May, 2026
Source:CMIE Economic Outlook, 1 Finance Research
Source: CMIE Economic Outlook, 1 Finance Research
Last Updated: 31 May, 2026
Source:CMIE Economic Outlook, 1 Finance Research
Source: CMIE Economic Outlook, 1 Finance Research

Overview

Recent Updates

  • The RBI's Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.25% in its June 2026 meeting and retained a neutral policy stance, signaling increased caution amid rising inflation risks and global uncertainties.
  • The RBI revised its FY27 CPI inflation forecast upward to 5.1%, citing higher crude oil prices, supply-chain disruptions, and monsoon-related risks.
  • While economic activity remains strong, the RBI lowered its FY27 GDP growth forecast from 6.9% to 6.6%, reflecting concerns over geopolitical tensions, weaker global demand, and higher input costs.
  • Rising oil prices and a resurgence in U.S. inflation have reduced expectations of global monetary easing. This has increased pressure on emerging-market central banks, including the RBI, to remain cautious about further rate cuts.
  • Earlier expectations of rate cuts in 2026 have largely faded. We now expect a 60% probability of no rate cut through 2026–27. This marks a clear transition from an easing cycle to a “wait-and-watch” phase.

Near-term Outlook

  • The Interest Rate Outlook Index now indicates a prolonged pause in policy rates, with 1 Finance Research suggesting that earlier expectations of rate cuts in 2026 have largely faded, as inflation risks re-emerge and global uncertainties persist.
  • Three overlapping risks — a below-normal 2026 southwest monsoon (92% of LPA), El Niño emergence, and elevated energy and commodity import prices — could push CFPI and headline CPI into the upper half of the 2–6% band by Q2 FY27.
  • Risks from global trade tensions, currency volatility, and external shocks remain, causing the RBI to remain cautious. However, improved inflation management and steady growth create a supportive environment for gradual monetary easing in the medium term.

Description

What is the Interest Rate Outlook Index?

The Interest Rate Outlook Index analyses interest rate fluctuations to understand economic phases and monetary policy stance, using indicators such as inflation, liquidity, credit demand, government borrowings, and investment scenarios. The index is useful for analysing interest rates’ impact on various sectors of the economy and changing borrowing costs

What are its components?

The Interest Rate Outlook Index covers diverse economic parameters, covering both demand and supply side components. We have assigned appropriate weights to each of these indicators, considering their individual impact in reflecting the interest rate outlook.

The High Frequency Indicators (HFIs) include:

AAA Rated Bonds - Yield Spread (1-Year & 10-Year)

AAA Rated Bonds - Yield Spread (1-Year & 3-Year)

AAA Rated Bonds - Yield Spread (1-Year & 5-Year)

AA Rated Bonds - Yield Spread (1-Year & 10-Year)

AA Rated Bonds - Yield Spread (1-Year & 3-Year)

AA Rated Bonds - Yield Spread (1-Year & 5-Year)

Central Government Fiscal Deficit

Consumer Price Index (CPI) Inflation - Core

Usability

How to use Interest Rate Outlook Index for better financial decision-making?

The Interest Rate Outlook Index serves as a pivotal tool in financial planning, offering a comprehensive view of interest rate movements and their broader implications. This index evaluates various factors including liquidity, credit demand, government borrowings, and investment scenarios. Interest Rate Outlook Index is indispensable in crafting strategies that are both responsive and anticipatory to economic shifts.

Insights

Fixed-Income Investment Decisions: Changes in interest rates directly impact bond markets. Understanding upcoming trends empowers you to get the right mix of fixed-income instruments – such as corporate bonds or government securities – to align with expected rate changes.

Equity Investment Strategy: Interest rate trends influence corporate earnings and, consequently, stock market performance. This also aids in evaluating whether to invest in growth stocks, which generally benefit from low interest rates, or value stocks, which are more attractive in high-interest periods.

Loan and Mortgage Decisions: The Interest Rate Outlook Index is essential for choosing between fixed or variable rate loans and making informed foreclosure decisions, leading to potential cost savings in liability planning.

Debt Refinancing: Insights from the Interest Rate Outlook Index enables you to optimally time debt refinancing, ensuring you to benefit from the most favourable interest rate environments.

Savings and Emergency Funds: Understanding the direction of interest rates helps in choosing the best saving instruments, balancing between liquidity and yield.

Expense Management: Anticipating changes in interest rates is crucial for managing large expenses, such as education or significant purchases, to align them with periods of favourable rates.

Annuity and Pension Fund Decisions: The Interest Rate Outlook Index aids in making informed decisions regarding annuities and pension funds, which are affected by interest rate changes, ensuring a stable retirement income adjusted for these fluctuations.

Historical Events

Apr

2022

RBI Rate Hikes

The Reserve Bank of India (RBI) initiated an aggressive monetary tightening cycle between Apr-22 and Dec-22 to combat post-pandemic inflation. The Monetary Policy Committee (MPC) raised the repo rate by 225 basis points (bps) across five meetings between Apr-22 and Dec-22, marking the steepest annual hike since 2018.

Mar

2020

COVID-19 Pandemic and Lockdown

The COVID-19 pandemic, a global health crisis caused by the novel coronavirus, began affecting India significantly from March 2020. Characterised by widespread infections, lockdowns, and public health emergencies, the pandemic has had profound implications on the Indian economy and society. According to the Ministry of Health and Family Welfare (MoHFW), COVID-19 caused 5,33,318 deaths as of December 19, 2023.

Jul

2017

Implementation of GST

On July 1, 2017, India underwent a major tax reform with the implementation of the Goods and Services Tax (GST), marking a significant milestone in the country's taxation history. GST was introduced as a comprehensive indirect tax on the manufacture, sale, and consumption of goods and services throughout India, replacing multiple cascading taxes levied by the central and state governments.

Nov

2016

Demonetisation

Demonetisation, announced on November 8, 2016, was a significant decision by the Indian government to withdraw the legal tender character of the Specified Bank Notes (SBNs), involving the high-value currency notes (₹ 500 and ₹ 1,000) from circulation. It represented a drastic step by the government in its fight to curb black money, counterfeit currency and corruption.

Apr

2014

New Monetary Policy Framework

In April 2014, the Reserve Bank of India (RBI) initiated a significant shift in its monetary policy approach, focusing more intently on inflation management. This shift was part of a broader strategy to stabilise the Indian economy by controlling high inflation rates. With the signing of the new Monetary Policy Framework Agreement (MPFA) between the Government of India and the RBI on Feb 20, 2015, Flexible Inflation Targeting (FIT) was formally adopted in India. The Central Government has notified 4% CPI inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6% and the lower tolerance limit of 2%. For the period April 1, 2021 to March 31, 2026 too, the inflation target has been kept at the same level as was for the previous 5 years.