SBI Report Predicts Significant Drop in India's CPI Inflation for FY26

State Bank of India forecasts a decline in India's CPI inflation to 2.2% for FY26, below the RBI's 2.6% projection. This reduction is driven by lower food prices, suggesting a potential need for RBI policy adjustment.


Devdiscourse News Desk | Updated: 14-10-2025 10:19 IST | Created: 14-10-2025 10:19 IST
SBI Report Predicts Significant Drop in India's CPI Inflation for FY26
Representative Image of a fruit market (File Photo/ANI) . Image Credit: ANI
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A recent report by the State Bank of India (SBI) indicates that India's Consumer Price Index (CPI) inflation for the fiscal year 2026 is predicted to significantly decrease to 2.2%, contrasting with the Reserve Bank of India (RBI)'s higher forecast of 2.6%. The decline in inflation is chiefly attributed to a reduction in food and beverage prices.

The SBI analysis highlights that India's CPI inflation reached a 99-month low of 1.54% in September 2025, primarily due to falling food and beverage inflation. Since October 2024, food prices have been the main force behind the decreasing inflation rate, as their contribution turned from positive to negative over the year.

The report cautions that the RBI, whose core function is to control inflation, may fall short of its targets if it prioritizes market turbulence over the evident downward trend in inflation. Moreover, the long-term inflation data diverge from the central bank's own projections. SBI advocates for a rate cut by the RBI to accommodate the decreasing inflation, suggesting it is a better alternative than being overly cautious.

(With inputs from agencies.)

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