According to the latest Bank of Baroda report, inflation is anticipated to align with the Reserve Bank of India’s projections in the first quarter of FY26. The RBI forecasts CPI inflation for FY 2025-26 at 3.7%, with Q1 at 2.9%. The BoB Essential Commodities Index registered a -1.8% decline YoY in June 2025, driven by price corrections in vegetables and pulses.
Retail prices for onions, potatoes, and tomatoes dropped significantly. Tur/Arhar pulses marked a -23.8% annual decline. The outlook suggests CPI may settle at 2.6% in June 2025, allowing the RBI space for growth-oriented measures.
Key highlights:
• RBI projects CPI at 2.9% in Q1 FY26
• BoB Essential Commodities Index declined by -1.8% in June
• Vegetables and pulses saw significant price drops
• Tur/Arhar pulses recorded a -23.8% annual decline
• CPI expected to settle at 2.6% in June 2025
The inflation outlook presents an opportunity for growth-focused measures by the RBI.
Source: Economic Times