SBI Forecasts Retail Inflation to Fall Below 3 Percent in First Quarter of FY26.

Banking & Finance

In May 2025, Mumbai (Maharashtra)-based State Bank of India (SBI) released a report projecting that India’s retail inflation, measured by the Consumer Price Index (CPI), is expected to remain below 3% during the first quarter of Financial Year 2025-26 (Q1 FY26), covering April to June 2025.


      - This projection comes after CPI inflation fell to 3.34% in March 2025, the lowest in 67 months, primarily driven by a sharp decline in food prices.

     

     

Main Point :-   (i) The report highlighted key insights on core inflation trends, noting that it increased from 3.28% in August 2024 to 3.77% in October 2024. It then remained steady, ranging between 3.6% and 3.7% from November 2024 to January 2025, before rising further to 4.1% in February and March 2025—marking the highest level in the past 15 months. When excluding gold, core inflation stood at 3.2%, which was lower than both the core and overall Consumer Price Index (CPI) inflation figures.

      (ii) SBI estimates that nominal Gross Domestic Product (GDP) growth for FY26 will be in the range of 9% to 9.5%, slightly lower than the Union Budget 2025-26’s projection of 10%.

(iii) SBI forecasts that the Reserve Bank of India (RBI) may consider aggressive rate cuts in FY26, potentially totaling 125 basis points, with 75 basis points in H1 FY26 and 50 basis points in H2 FY26.
About SBI

Chairman : Challa Sreenivasulu Setty
Headquarter : Mumbai
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