RBI Forecasts 4.2% Inflation for FY26, Citing Food Price Concerns

Under the leadership of the new governor Sanjay Malhotra, the Reserve Bank of India (RBI) projects inflation at 4.2% for the fiscal year 2025-26. While retail inflation eased to 5.22% in December 2024, food inflation remains a concern, with the Economic Survey 2024-25 indicating a rise in the Consumer Food Price Index. The RBI expects inflation to be 4.5% in the first quarter, 4% in the second, 3.8% in the third, and 4.2% in the fourth quarter of FY26, balancing the risks. The central bank may delay rate cuts due to inflation still being above the 4% midpoint target.

 

Source: The Economic Times, CNBC TV18, Business Standard,