inflation will be less
Common people may have got a shock on the inflation front in the month of November, but the coming year will provide relief from inflation. Next year in 2026, the country’s retail inflation may decline by up to 35 basis points.
According to the report of SBI Research, inflation in the country will come down next year. In which the role of GST reforms is going to be important. The report says that this impact does not include discounts on e-commerce sales, which may increase further due to the reduction in GST. However, it has also been said that due to these reforms, the total reduction in CPI for the financial year 2025-26 could be about 35 bps. In November, the inflation rate in Kerala was 8.27%, of which it was 9.34% in rural areas and 6.33% in urban areas. The report said that the sharp increase in the prices of gold, silver and oil and fats, which are used extensively in the state, could be a major reason for this.
According to the data of the report, a change has been observed in the trend of India’s CPI inflation and it has increased marginally from 0.25% in October 2025 to 0.71% in November 2025. At the same time, it is expected to reach 2.7% by March 2025. Given the fall in the value of rupee, inflation in India is likely to increase further. Inflation is estimated to be 1.8% for fiscal year 2026 and 3.4% for fiscal year 2027. However, the report says that at least there is no possibility of any change in the interest rates stance of the Reserve Bank of India (RBI) in the February monetary policy meeting.
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Inflation will decline
Standard Chartered Global Research had already estimated that the cut in GST rates could expand India’s economy (GDP) by 0.1 to 0.16 percentage points and reduce annual inflation by 40 to 60 bps. In its report titled Timely India GST Cut, Standard Chartered said the damage to government revenue from the GST cut would be limited, which could ease concerns over government spending and income. However, the report also said that there will still be pressure on the combined fiscal deficit which could be around 0.15 to 0.20% of GDP.
The report described the changes made in GST as a timely step and said that it will support economic growth amid tariff-related challenges. It also said that process reforms such as faster registration and refunds will improve ease of doing business and improve growth prospects in the medium term, provided the GST Council implements them properly.
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