Mumbai: The Reserve Bank of India on Wednesday cut the CPI inflation to 4 per cent for FY26, from the 4.2 per cent forecast earlier. The decision was announced on Wednesday after the Monetary Policy Committee’s (MPC) 54th meeting, chaired by RBI Governor Sanjay Malhotra.
‘Headline inflation moderated during January-February 2025 following a sharp correction in food inflation. The outlook for food inflation has turned decisively positive. The uncertainties regarding rabi crops have abated considerably and the second advance estimates point to a record wheat production and higher production of key pulses over that last year. Along with robust kharif arrivals, this is expected to set the stage for a durable softening of food inflation,’ said RBI Governor Sanjay Malhotra.
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Assuming a normal monsoon, CPI inflation for the financial year 2025-26 is projected at 4.0 per cent, with Q1 at 3.6 per cent; Q2 at 3.9 per cent; Q3 at 3.8 per cent; and Q4 at 4.4 per cent. The risks are evenly balanced. Skymet on Wednesday predicted an above normal (103 LPA) monsoon this year in India.
India’s CPI inflation has come under the RBI’s target limit of 4 per cent (+/- 2 per cent). In February, India’s retail inflation eased a seven-month low of 3.61 per cent.
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