<p>Mumbai: The Reserve Bank on Wednesday lowered the inflation projection for the current fiscal to 4 per cent from 4.2 per cent earlier, taking into account good agricultural output and falling crude prices.</p>.<p>Consumer Price Index (CPI) based headline retail inflation declined by a cumulative 1.6 percentage points during January-February 2025, from 5.2 per cent in December 2024 to a low of 3.6 per cent in February 2025.</p>.<p>On the back of a strong seasonal correction in vegetable prices this year, food inflation dropped to a 21-month low of 3.8 per cent in February.</p>.<p>Unveiling the first bi-monthly monetary policy of financial year 2025-25, RBI Governor Sanjay Malhotra said the outlook for food inflation has turned decisively positive.</p>.RBI cuts rates, changes stance to 'accommodative' as Trump tariffs add to growth risks.<p>There has been a substantial and broad-based seasonal correction in vegetable prices.</p>.<p>"On the inflation front, while the sharper-than-expected decline in food inflation has given us comfort and confidence, we remain vigilant to the possible risks from global uncertainties and weather disturbances," the governor said.</p>.<p>He further said the uncertainties on rabi crops have abated considerably and the second advance estimates point to a record wheat production and higher output of key pulses over the last year.</p>.<p>Along with robust kharif arrivals, this is expected to set the stage for a durable softening in food inflation, the governor said.</p>.<p>Sharp decline in inflation expectations for three months and one year ahead period would help anchor inflation expectations going ahead, the central bank said.</p>.<p>Furthermore, the fall in crude oil prices augurs well for the inflation outlook, said the Monetary Policy Statement, 2025-26 Resolution of the Monetary Policy Committee (MPC).</p>.<p>On the other hand, there are concerns on lingering global market uncertainties and recurrence of adverse weather-related supply disruptions pose upside risks to the inflation trajectory.</p>.<p>Taking all these factors into consideration, and assuming a normal monsoon, Malhotra said CPI inflation for the financial year 2025-26 is projected at 4 per cent, with Q1 at 3.6 per cent; Q2 at 3.9 per cent; Q3 at 3.8 per cent; and Q4 at 4.4 per cent. The risks are evenly balanced.</p>.<p>The government will release the retail inflation numbers next week. </p>
<p>Mumbai: The Reserve Bank on Wednesday lowered the inflation projection for the current fiscal to 4 per cent from 4.2 per cent earlier, taking into account good agricultural output and falling crude prices.</p>.<p>Consumer Price Index (CPI) based headline retail inflation declined by a cumulative 1.6 percentage points during January-February 2025, from 5.2 per cent in December 2024 to a low of 3.6 per cent in February 2025.</p>.<p>On the back of a strong seasonal correction in vegetable prices this year, food inflation dropped to a 21-month low of 3.8 per cent in February.</p>.<p>Unveiling the first bi-monthly monetary policy of financial year 2025-25, RBI Governor Sanjay Malhotra said the outlook for food inflation has turned decisively positive.</p>.RBI cuts rates, changes stance to 'accommodative' as Trump tariffs add to growth risks.<p>There has been a substantial and broad-based seasonal correction in vegetable prices.</p>.<p>"On the inflation front, while the sharper-than-expected decline in food inflation has given us comfort and confidence, we remain vigilant to the possible risks from global uncertainties and weather disturbances," the governor said.</p>.<p>He further said the uncertainties on rabi crops have abated considerably and the second advance estimates point to a record wheat production and higher output of key pulses over the last year.</p>.<p>Along with robust kharif arrivals, this is expected to set the stage for a durable softening in food inflation, the governor said.</p>.<p>Sharp decline in inflation expectations for three months and one year ahead period would help anchor inflation expectations going ahead, the central bank said.</p>.<p>Furthermore, the fall in crude oil prices augurs well for the inflation outlook, said the Monetary Policy Statement, 2025-26 Resolution of the Monetary Policy Committee (MPC).</p>.<p>On the other hand, there are concerns on lingering global market uncertainties and recurrence of adverse weather-related supply disruptions pose upside risks to the inflation trajectory.</p>.<p>Taking all these factors into consideration, and assuming a normal monsoon, Malhotra said CPI inflation for the financial year 2025-26 is projected at 4 per cent, with Q1 at 3.6 per cent; Q2 at 3.9 per cent; Q3 at 3.8 per cent; and Q4 at 4.4 per cent. The risks are evenly balanced.</p>.<p>The government will release the retail inflation numbers next week. </p>