Retail prices falling below the Reserve Bank of India’s (RBI) medium-term target of 4 percent gives confidence of durable alignment of headline inflation, with the target of 4 percent over a 12-month horizon, the central bank has said in its annual report.
“With inflation falling below the target in February and March 2025, supported by a sharp fall in food inflation, there is now greater confidence about a durable alignment of headline inflation with the target of 4.0 per cent over a 12-month horizon,” the report, released on May 29, said.
Retail inflation slowed to 3.16 percent in April from 3.34 percent in March, the lowest year-on-year reading since July 2019.
Increasing incidences of climate shocks, as seen in recent years, however, warrant careful monitoring of food price outlook, the report said.
Prolonged geopolitical uncertainties, excessive global financial market volatilities, trade fragmentation and restrictive trade policies pose upward risks to the inflation trajectory.
Taking into account these factors, CPI inflation for FY26 is projected at 4 percent, with risks evenly balanced, the report added.
(This is a developing story, please check back for more details)
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