New Delhi – Dec. 13 (LatestNewsX) – Cutting the goods and services tax is projected to trim the consumer price index (CPI) inflation by about a quarter‑percentage point from September to November 2025 and could shave another 35 basis points off the current fiscal year 26 (FY26), according to a fresh study.
The State Bank of India (SBI) revealed that its first‑quarter FY27 inflation outlook has been pulled back by roughly one percentage point, now at 3.9 % instead of 4.9 %. It also trimmed the third‑quarter FY26 figure to 3.8 % from an earlier 0.6 %.
SBI cited a combination of falling food prices, stronger than expected Kharif output, solid Rabi sowing, good reservoir levels, and favorable soil moisture as reasons for expecting FY26 inflation to settle at 1.8 % and FY27 at 3.4 %.
In its December policy update, the Reserve Bank of India (RBI) lowered its FY26 inflation forecast to 2 % from 2.6 % in October and 4.2 % in February. While the RBI has kept the possibility of future rate changes open, it anticipates that the repo rate will stay near 5.25 % for a longer period.
CPI momentum swung back in November, climbing to 0.71 % after a 0.25 % dip in October. Food and beverage inflation slowed less than expected, whereas fuel and lighting costs surged to 2.32 %. Prices for miscellaneous items fell, but personal‑care goods and consumer goods saw hikes linked to higher gold prices.
The latest figures show a mixed picture: rural food prices sometimes fall while urban food costs rise, driven by staples such as cereals and milk, as well as beverages, prepared foods and snacks—the dynamics shift from month to month, the report noted.
Gold inflation remains stubbornly high at 58 %, and when gold is excluded, headline CPI registered a slight year‑over‑year decline of –0.12 %.
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