New Delhi, Aug 2
Headline inflation in India is expected to stay below the Reserve Bank of India’s (RBI) 4 per cent target over the next two quarters, supported by a favourable base effect and muted food prices, a new report said on Saturday.
The data compiled by CareEdge Ratings said the recent moderation in inflation has been largely driven by easing food prices, with CPI inflation falling to 2.1 per cent in June 2025 -- the lowest level since January 2019.
The report noted that while inflation is likely to remain low in the near term, it could start rising from the third quarter and cross the 4 per cent mark in the last quarter of the current financial year as the base effect fades.
For FY26, the agency expects CPI inflation to average around 3.1 per cent, which is lower than the RBI’s projection of 3.7 per cent.
“However, due to the low base in FY26, inflation is projected to rise to about 4.5 per cent in FY27,” the report said.
The sharp fall in June inflation was led by deflation in food and beverages, including vegetables, pulses, spices, and meat.
However, prices of edible oils and fruits continued to show double-digit inflation.