India’s inflation looks set to cool off more than expected this year and next, thanks to some strong homegrown boosts, according to a fresh report from the State Bank of India (SBI). The analysis points to factors like a solid monsoon season, bumper kharif crop planting, healthy water levels in reservoirs, plenty of foodgrain reserves, and key tweaks to GST rates that are all helping keep price rises in check.
The Reserve Bank of India (RBI) recently dialed back its forecast for consumer price index (CPI) inflation in FY26 by 50 basis points to just 2.6 percent—a big drop of 160 basis points from what it predicted back in April. But the SBI report goes further, suggesting real inflation numbers for both FY26 and FY27 could dip even lower than these updated RBI estimates, riding on the positive vibe in the domestic economy.
On a brighter note for growth, the RBI bumped up its real GDP growth projection for FY26 to 6.8 percent. Looking ahead to FY27, it sees inflation settling at 4.5 percent.
With global markets shaky and economic worries abroad, the RBI’s Monetary Policy Committee (MPC) made a smart call by keeping interest rates steady, the report notes. Everyone on the committee agreed, which makes sense from a watchdog’s view. Clear talk from the RBI is key here—it helps shape how people expect things to play out and keeps everyone on the same page about future moves.
The report hints that the RBI hasn’t ruled out interest rate cuts down the line, especially with these low inflation forecasts and some softer growth outlooks. That said, no one’s pinning down when that might happen.
This hold-steady approach shows real flexibility in India’s monetary policy, going beyond just rates. It’s helped by steady liquidity at home and a calm external setup, even with trade tensions simmering. Plus, a wave of forward-thinking reforms is positioning India stronger on the world stage and bolstering its tough economy.
Stay informed on all the latest news, real-time breaking news updates, and follow all the important headlines in world News on Latest NewsX. Follow us on social media Facebook, Twitter(X), Gettr and subscribe our Youtube Channel.
