Food inflation to stay sticky, rate cuts may get pushed to FY26: Economists

Despite consumer inflation dipping below the 4% target for the first time in five years, the Reserve Bank of India (RBI) is unlikely to soften interest rates this fiscal year. Economists attribute the drop to a base effect and caution that it may not signify a lasting trend against persistent inflation. Central bank Governor Shaktikanta Das emphasized that future rate decisions will be influenced by food price movements and ongoing inflation pressures. The RBI has revised its inflation forecasts upward for the current and next quarter, projecting 4.4% and 4.7% respectively.