RBI lowers its prediction for FY26 inflation to 2%.

Governor Sanjay Malhotra announced the monetary policy on December 5, saying that the Reserve Bank of India (RBI) had changed its inflation forecast from 2.6 percent to 2 percent. Inflation was predicted to be 0.6 percent in Q3 compared to 1.8 percent in Q2 and 2.9 percent in Q4 compared to 4.0 percent in Q1. Inflation is predicted to be 3.9 percent in Q1 of the upcoming fiscal year, down from the prior projection of 4.5 percent, and 4 percent in Q2. Reducing inflation Retail inflation in India decreased dramatically from 1.44 percent in September to 0.25 percent in October, the lowest amount in the current series that started in 2013. The food index dropped to -5.02 percent in October from -2.3 percent the month before, indicating a widespread softening of important commodities and edible goods, which led to the moderation. Governor Sanjay Malhotra announced the monetary policy on December 5, saying that the Reserve Bank of India (RBI) had changed its inflation forecast from 2.6 percent to 2 percent. The Reserve Bank of India (RBI) has reduced its inflation forecast from 2.6% to 2%, as announced by Governor Sanjay Malhotra on December 5. The central bank believes that inflation will remain low in the coming months because prices of essential goods are falling and supply conditions are improving. This change in the forecast shows that the RBI is confident about price stability in the economy. Retail inflation in India dropped sharply from 1.44% in September to 0.25% in October, which is the lowest level since the inflation calculation method started in 2013. The biggest reason for this decline is the reduction in food prices. The food inflation index fell from –2.3% to –5.02%, showing that prices of key food items have gone down. Good crop supply, lower transport costs, and government support helped reduce prices. The RBI now expects inflation to be 0.6% in Q3 and 2.9% in Q4 of the current financial year, compared to the earlier forecast of 1.8% and 4%. For the next financial year, inflation is expected to be 3.9% in the first quarter and 4% in the second quarter, which is lower than earlier estimates. This means the RBI believes inflation will stay within its comfort range while the economy continues to grow. Even though inflation is low, the RBI is careful about global risks such as high energy prices and geopolitical tensions. The central bank will continue to monitor food price movements, global commodity markets, and the value of the Indian rupee before deciding on any major changes in interest rates. This shows that RBI wants to keep inflation under control while supporting economic growth.