India's inflationary print is likely to come around 0.45 per cent next month and that makes a strong case for decisive actions, according to a new State Bank of India (SBI) report, which stated that being the collective voice of myriad sections of markets and people at large, "we believe the RBI MPC too would listen to the tunes that are changing in these interesting times".
For the record, FY27 inflation print are decisively lower at 3.7 per cent for now, said Dr Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI.
"RBI, with its primary mandate of inflation targeting, runs the risk of missing the bull's eye if it remains fixated on market cacophony even when the deceleration in inflation has been way too evident and long term actuals, in general, seem quite detached from the figures released by the Central Bank in its own forecasters' assessment," Ghosh argued.
"It would be better to err on rate cut front (Type I error) than to err on the side of caution, languishing far behind the curve as markets seem to be quite uncertain about reading the Mint street's mind," Ghosh added.
India's CPI inflation moderated to 99-month low of 1.54 per cent in September due to decline in food and beverages inflation.
Interestingly, the decline in inflation since October has been driven by the food group, as its contribution declined from a large positive to negative between October 2024 and September 2025.
"We expect average CPI inflation for FY26 to be now at 2.2 per cent, much lower than 2.6 per cent RBI forecast," said the SBI report.
Item wise, vegetable prices continued to stay in negative zone while the deceleration in pulse prices continued and spices too exhibited decline in September 2025.
Additionally, fruits inflation declined (9.93 per cent) and oil and fat CPI too declined (18.34 per cent). On the other side, CPI inflation increased in case of personal care and effects owing to higher gold prices while housing CPI too witnessed a modest pick up in September 2025.
Further, the decline in food inflation for 11 consecutive months up to September 2025, a first in the current CPI series, was the largest both in terms of magnitude and duration and marked by two distinct phases.
"The increase in Kharif sowing mainly witnessed in rice, maize, urad and sugarcane should keep the prices of these products low in coming months though some disruptions may come through excess rainfalls seen in post monsoon period. Turning to inflation trajectory across regions, both urban and rural areas have been experiencing a sustained easing since October," according to the report.
(With inputs from IANS)
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