The Reserve Bank of India (RBI) has revised its inflation forecast for 2025-26 to 4.0%, down from 4.2%, citing a significant improvement in the food inflation outlook, RBI Governor Sanjay Malhotra said on Wednesday.
“Headline inflation moderated in January-February 2025 following a sharp correction in food inflation,” Malhotra stated, adding that uncertainties around Rabi crops have eased. Second advance estimates point to record wheat and higher pulse production, which, along with robust Kharif arrivals, sets the stage for a durable softening of food inflation.
He also highlighted that a sharp decline in household inflation expectations and lower crude oil prices further support a positive inflation trajectory. However, global uncertainties and weather-related supply shocks remain potential upside risks.
Assuming a normal monsoon, the RBI projects Consumer Price Index (CPI) inflation at 3.6% in the first quarter of FY26, 3.9% in the second, 3.8% in the third, and 4.4% in the final quarter.
Malhotra described the global economic environment as “exceptionally uncertain,” complicating policy decisions. Yet, he emphasized the RBI’s commitment to supporting growth while remaining vigilant on inflation.
“Our aim is non-inflationary growth, underpinned by strong demand-supply dynamics and macroeconomic balance,” he said. The RBI, he assured, will remain “agile, decisive, and transparent” in its policy responses.
(With IANS inputs)
