The RBI’s monetary policy committee (MPC) on Friday slashed its forecast for India’s inflation rate for the financial year 2025-26 to 2 per cent — from 2.6 per cent predicted in October due to the sharp decline in food prices and the GST rate cuts playing out.

RBI Governor Sanjay Malhotra said that “the MPC noted that headline inflation has eased significantly and is likely to be softer than the earlier projections, primarily on account of the exceptionally benign food prices. Reflecting these favourable conditions, the projections for average headline inflation in 2025-26 and Q1 2026-27 have been further revised downwards.”

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Malhotra also pointed out that core inflation (which excludes food and fuel) remained largely contained in September-October, despite continued price

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