India's economy grew 7.8 per cent in the first quarter of 2026-27, showing resilience despite global turbulence, the Reserve Bank of India's September Bulletin has said. High-frequency indicators through August pointed to sustained demand in industry and services.

Headline inflation rose to 4.8 per cent in August, driven by food and beverages along with fuel and core components. Strong export growth helped narrow the merchandise trade deficit during the quarter, the Bulletin noted.

Foreign exchange reserves touched a record $765.9 billion as of September 18, supported by strong FDI flows and a moderate current account deficit. System liquidity remained in surplus, partly boosted by inflows through Foreign Currency Non-Resident (Bank) deposits.

The Bulletin flagged geopolitical tensions, rising crude oil prices and weather-related uncertainty as key downside risks. Foreign portfolio investors turned net sellers in September, while equity markets stayed subdued in August and September.

The figures will guide expectations ahead of the RBI's next policy review as it balances growth strength against inflation pressure.