HomeNationRBI Keeps FY26 Inflation at 2.1%, Sees Rise to 4.2% by Q2...

RBI Keeps FY26 Inflation at 2.1%, Sees Rise to 4.2% by Q2 FY27

Delhi: The Reserve Bank of India (RBI) has maintained its inflation projection for the financial year 2025–26, indicating confidence that price pressures in the economy are currently under control. In its latest monetary policy announcement, the central bank said it expects consumer price inflation to average around 2.1 percent in FY26, almost unchanged from its earlier estimate.

According to the RBI, inflation has eased significantly over the past few months due to better supply conditions, stable food prices, and supportive policy measures. The Governor noted that inflation during November and December remained below the RBI’s tolerance band, reflecting a period of relative price stability for consumers.

While the outlook for FY26 remains comfortable, the central bank has cautioned that inflation may begin to rise gradually toward the end of the year. The RBI expects inflation to increase to around 3.2 percent in the fourth quarter of FY26, driven by improving demand and some firming up of input costs.

Looking further ahead, the RBI projects inflation to move closer to its medium-term target in FY27. Consumer price inflation is estimated at 4 percent in the first quarter of FY27 and 4.2 percent in the second quarter. The slight upward trend is expected to be influenced by higher prices of precious metals, strengthening domestic consumption, and a gradual pickup in economic activity.

The central bank stressed that the projected rise in inflation does not signal an immediate risk but reflects a normalisation process as the economy continues to grow. RBI officials said they will remain watchful of global uncertainties, commodity price movements, and domestic demand conditions while framing future policy decisions.

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