RBI MPC Meet 2025 Inflation Forecast: Sanjay Malhotra-led MPC projects inflation at 4.2% for FY26
Reserve Bank of India's (RBI) Monrtary Policy Committee (MPC) on Friday said that the inflation has declined, supported by a favourable outlook on food and is expected to moderate in FY26, offering further relief to Indian households.
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With the new governor Sanjay Malhotra at the helm, the RBI has forecasted inflation at 4.2% for the fiscal year 2025-26. For the four quarters of FY26, the RBI MPC has projected inflation to be at 4.5% in the first quarter; Q2 at 4%; Q3 at 3.8% and Q4 at 4.2% with risks evenly balanced.
Earlier last month, the Economic Survey for 2024-25 projected that food inflation is likely to soften in Q4 FY25, while acknowledging that global uncertainties continue to pose risks. The report, prepared by the Chief Economic Advisor to the Finance Ministry, underscored the fact that India's inflation landscape in 2024-25 remains a mixed bag of progress and persistent challenges.
While the country had managed to bring retail inflation down to a four-year low of 5.4% in FY24, new economic headwinds—including a weakening rupee, volatile inflation, and declining foreign investment—threaten macroeconomic stability.
RBI governor in the beginning of his address said that the average inflation has ben lower post the production of inflation targeting framework and that this flexible model has served India well.
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