New Delhi, Oct 3: SBI believes that inflation in India in the current and next financial years (FY26 and FY27) will fall well below the projections made by the Reserve Bank of India (RBI). According to SBI’s analysis, the central bank’s policy should be understood not only as a “monetary policy” but also a “regulatory policy,” tailored to India’s specific economic landscape.The bank pointed out that multiple domestic factors are alleviating inflationary pressures: a favourable monsoon, strong kharif crop sowing, ample reservoir levels, sufficient food grain stocks, and recent adjustments in GST rates. All of these, SBI argues, are contributing to quicker-than-expected moderation in price increases.
In light of these, the RBI recently cut its consumer price index (CPI) inflation forecast for FY26 by 50 basis points, setting it at 2.6 percent. This marked a downward revision of 160 basis points from its April estimate. However, SBI expects the actual inflation figures for FY26 and FY27 to be even lower than these revised estimates.
In its outlook, the RBI has projected India’s real GDP growth for FY26 at 6.8 percent. For FY27, inflation has been forecast at 4.5 percent, though SBI remains confident that the numbers will undershoot that mark.
Given global volatility and uncertain market conditions, SBI regards the Monetary Policy Committee’s (MPC) choice to hold rates steady as reasonable. The report also stresses that clear and effective communication by the RBI is crucial in shaping expectations and maintaining clarity in its policy approach.