New Delhi, Nov 27 – The Indian government’s Monthly Economic Review, released on Thursday, paints a picture of a country grounded in strong inflation expectations, solid public investment, and steady rural‑urban demand that together give the economy a firm footing and a promising path forward through the rest of FY26.
According to the Ministry’s assessment for October, the macro snapshot remains steady. Inflation is easing, domestic demand keeps pulling the economy, and the policy engine feels steady. GST reforms are already showing their hand in consumption trends, and a robust agricultural cycle—visible in the healthy start to Rabi sowing and plenty of water stored in reservoirs—has lifted food supply and rural earning prospects.
On the corporate front, businesses look healthy: profits keep growing and balance sheets stay solid. Domestic financial markets are gaining confidence thanks to more institutional players. The external arena remains tangled, reflecting a complicated global backdrop, but services exports keep holding their own, offsetting swings in goods trade.
The report stresses that the outlook for inflation remains favorable. Lower global commodity prices, stable energy costs, and targeted domestic supply measures provide support. Still, the mix of risks means vigilance is necessary. Global turbulence—shifting trade rules, geopolitical tensions, and market volatility—could bite exports, capital flows, and investor moods. Yet the economy seems equipped to weather these shocks.
Retail inflation hit a historic low, falling to 0.25 % in October 2025 from 1.44 % in September, largely thanks to the full impact of GST cuts, a soft base effect, and sharp tariffs in food items. Food prices continued to deflate, dropping 5.0 % – the steepest one‑year fall in more than ten years – driven mainly by cheaper tomatoes, onions, and potatoes as well as easing pulse prices. Core inflation stayed steady at 4.3 %, signalling robust demand conditions.
Across April‑October 2025, overall inflation registered 4.8 %, showing a consistent easing trend over the year. The Monetary Policy Committee, taking note of this headway, has trimmed its 2025‑26 inflation forecast to 2.6 %. The revision reflects confidence that inflation will stay anchored, provided weather remains normal and supply chains stay uninterrupted.
sps/na
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