Revised Inflation: Governor Sanjay Malhotra of the Reserve Bank of India (RBI) updated the inflation forecast on Wednesday, lowering it from the initial 3.1% August estimate to 2.6%. “The overall inflation outlook has turned notably more benign in recent months, with headline inflation being revised down from 3.7% in June to 3.1% in August, and further to 2.6% most recently,” the governor of the RBI stated.

Additionally, the RBI MPC reduced its prediction for the first quarter of FY27 from 4.9% to 4.5%. It is still more than the 4% target set by the central bank, though. The RBI’s headline inflation forecast for the entire year FY26 is 2.6%, which is far lower than the 3.1% estimate from August. Estimates for each quarter are 1.8% in Q2, 1.8% in Q3, and 4% in Q4. According to the central bank, the outlook’s risks are “equally balanced.”

Take a look at the CPI Inflation Projections:

“Low inflation has primarily been attributed to a sharp fall in food inflation, as it remained largely contained,” the governor of the RBI stated. The RBI MPC reduced its inflation estimate for FY26 from 3.7% in June to 3.1% at its most recent meeting in August. In the meantime, the RBI’s Monetary Policy Committee (MPC) has adopted a “neutral” position and unanimously maintained the repo rate at 5.5%.

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