India’s central bank, the Reserve Bank of India (RBI), has cut its inflation forecast for the current financial year to 2.6 percent. This marks a big drop from earlier estimates and signals easing price pressures across the country.
RBI Governor Sanjay Malhotra shared the update during Wednesday’s policy announcement. The Monetary Policy Committee (MPC) noted that inflation trends have grown even more favorable in recent months. Back in June, the RBI projected average headline inflation at 3.7 percent. They lowered it to 3.1 percent in August, and now it’s down further to 2.6 percent.
Malhotra explained that lower food prices and adjustments to Goods and Services Tax (GST) rates have driven this positive shift. “The average headline inflation for this year has been revised lower,” he said, highlighting the MPC’s view.
The revisions extend to the coming quarters too. Headline inflation for the fourth quarter of this year and the first quarter of next year will likely come in lower than before expected.
On the economic front, Malhotra painted an upbeat picture for India. Thanks to a strong monsoon season, the economy showed solid growth in the first quarter. At the same time, inflation has cooled considerably, boosting overall stability.
Globally, things look mixed. Major players like the United States and China have bounced back stronger than thought, with robust growth. But uncertainties in policies around the world continue to cast a shadow. In some advanced economies, inflation still runs above targets, challenging central banks as they balance growth and prices.
These updates from the RBI point to optimism about India’s economic path, with controlled inflation supporting steady expansion.
In a unanimous vote, the MPC decided to hold the key policy repo rate steady at 5.5 percent. The committee wrapped up its meetings on September 29, 30, and October 1 after reviewing the latest economic data.
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