SBI has released its estimate regarding inflation.
The country’s Central Bank Reserve Bank of India has spent 24 hours for the prediction of inflation, after which the country’s largest government bank has also brought out its estimate. The special thing is that the approximate figures that have been told by SBI are very shocking. According to a report released by the State Bank of India (SBI), inflation in the current financial year and the next financial year (FY 27) is likely to be much less than the estimates of the Reserve Bank of India (RBI). The report emphasized that many domestic factor are helping to reduce the price pressure. These include good monsoon progression, good kharif sowing, adequate levels of reservoirs, adequate buffer stock of food grains and most important factor, GST reform.
Inflation will be less than RBI estimates
Keeping these things in mind, the RBI has recently reduced its FY 26 CPI inflation inflation estimate from 50 basis points to 2.6 percent, which is less than the estimated level 160 basis points in April. However, the report states that due to the positive domestic environment, real -6 in both FY 26 and FY 27 can be much less than the revised estimates of RBI. The report said that RBI has reduced the CPI inflation estimate of FY 2026 from 50 basis points to 2.6 percent. We believe that inflation figures are likely to be very low in both FY 2026 and FY 2027. Along with inflation, RBI has also revised the estimate of real GDP growth for FY 26 to 6.8 percent.
Gate is open for policy rate cut
The inflation figure for FY 2027 is estimated to be 4.5 percent. The report further states that given the global economic uncertainty and instability in financial markets, the MPC has not made any changes in the policy rate, which is rational. It further states that it is important in shaping the assumptions of the reaction function, giving direction to the Monetry Policy Conciliation Expectations and maintaining clarity in the forward guidance. It has been reported in the report that given the recent small adjustments made in low inflation forecasts and growth estimates, it seems that the RBI has kept the way open to cut rates in future. However, the exact time of such a step is uncertain.