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Inflation undershoots, yet risks remain: Rate cuts may spark volatility
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India's Consumer Price Index (CPI) inflation eased to 2.1 per cent year-on-year in June 2025, down from 2.82 per cent in May. For the April–June quarter, CPI inflation averaged 2.7 per cent, lower than the Reserve Bank of India's (RBI's) projection of 2.9 per cent. This decline, largely driven by falling food prices, may offer near-term comfort to the Monetary Policy Committee (MPC). However, a forward-looking view suggests that a more cautious approach to interest rates is warranted.
We forecast CPI inflation to average 3 per cent in FY26, significantly lower than the 4.6 per cent recorded in FY25. In
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Time of India
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4 hours ago
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