The Reserve Bank of India (RBI) on Friday revised its inflation outlook for the current financial year, FY26, projecting Consumer Price Index (CPI) inflation at 2 per cent—down by 0.6 percentage points from its earlier estimate.
The announcement was made by RBI Governor Sanjay Malhotra while presenting the monetary policy.
He said, “Inflation is likely to be softer than what was projected in October, mainly due to the fall in food prices. Considering all these factors, CPI inflation for this year is now projected at 2 per cent, again about 0.6 per cent downwards from our earlier outlook.”
Headline CPI inflation fell to an all-time low in October 2025, driven by a sharper-than-expected correction in food prices, deviating from the usual seasonal trend seen in September and October.
Malhotra noted that core CPI inflation remained largely contained during September–October, despite continued price pressures from precious metals.
“Turning to the inflation outlook, food supply prospects have improved on the back of higher kharif production, healthy rabi sowing, adequate reservoir levels, and conducive soil moisture. Except for some metals, international commodity prices are likely to moderate going forward,” he said.
Reiterating the revised forecast, the Governor added that underlying inflationary pressures are even lower, noting that the rise in precious metal prices alone contributes around 50 basis points to the inflation numbers.
Alongside the inflation revision, the RBI also updated its GDP projections for FY26. Governor Malhotra announced that the Indian economy is now expected to grow at 7.3 per cent in 2025 -26 – about half a percentage point higher than the previous estimate.
(ANI)
