India’s consumer price inflation to align with 4% target in FY26: Economic Survey

Led by a good Rabi harvest, India’s inflation is likely to ease in the fourth quarter of the current financial year, aligning with the RBI and IMF target of around 4% by FY26, noted the Economic Survey 2024-25 on Friday, January 31. While risks to inflation persist due to adverse weather events and rising international agricultural commodity prices, the positive outlook on Rabi production is expected to contain food prices in the first half of fiscal year 2025-26.
The International Monetary Fund (IMF) has reported a notable moderation in the global inflation rate, which decreased to 5.7% by 2024, down from its peak of 8.7% in 2022. This global trend has been mirrored in India, where retail inflation has seen a reduction from 5.4% in FY24 to 4.9% in FY25, according to the latest Economic SurveyGlobal political and economic uncertainties continue to present challenges to inflation management. “Risks for inflation remain due to global political and economic uncertainties,” the survey states, signalling the need for careful policy interventions to keep inflation in check.

Earlier, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2024-25 in the Lok Sabha.  The Economic Survey is an annual document presented by the government ahead of the Union Budget to review the state of the economy. The document also provides an overview of the short-to-medium-term prospects of the economy. The Economic Survey is prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance under the supervision of the chief economic adviser.