RBI’s inflation outlook
For FY26, the central bank revised its CPI inflation forecast down to 3.70%, from the earlier projection of 4% made in April. The quarter-wise breakdown now stands at: Q1: 2.9%, Q2: 3.4%, Q3: 3.5%, Q4: 4.4%.
The MPC observed that while inflation has softened considerably since breaching the tolerance band in late 2024, global uncertainties and supply-side risks continue to warrant close monitoring. Nonetheless, the RBI had said the inflation outlook is “evenly balanced” and projected further easing in price pressures in the coming months.
“Inflation has softened significantly over the last six months from above the tolerance band in October 2024 to well below the target, with signs of broad-based moderation,” RBI Governor Sanjay Malhotra said in his post-policy address.
