Headline inflation increased 0.76% in the rural sector and 2.03% in urban areas in December. However, fuel and light inflation rate eased at 1.97%, lower than the 2.32% print in November.<\/p>\n
The “lower inflation print is likely to keep the hopes of one last rate cut alive” but given the start of a new CPI series from next month, the central bank can do a “better assessment of inflation and rates trajectory” from April policy, said Anubhuti Sahay, head of India Economics Research at Standard Chartered Bank.<\/p>\n
The Reserve Bank of India expects<\/a> consumer inflation to be 2% for the fiscal year ending March 2026,\u00a0down<\/a>\u00a0from a 2.6% forecast made in October. The central bank estimated inflation at 2.9% for the three months to March, rising to 4.0% for the quarter ending September 2026.<\/p>\n Record-low inflation in 2025 slowed nominal GDP growth, raising concerns among policymakers and investors.<\/p>\n India released an early estimate last week projecting real GDP<\/a> growth of 7.4% for fiscal year 2026 and nominal GDP growth of 8.0%. This was sharply<\/a> lower than the 10.1% nominal GDP growth forecast in the Union Budget for the same year.<\/p>\n “Nominal GDP growth rate slowdown is a cause of concern,” said Rana Gupta, managing director of Indian Equities at Manulife Investment Management. He added that earnings growth has decelerated to 9-10% in fiscal year 2026 from 12-13% earlier.<\/p>\n Gupta told CNBC’s “Inside India” on Thursday that he expected nominal GDP growth to pick up to 10-11% in fiscal year 2027 as inflation rose.<\/p>\n![\"India's](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/01\/108249744-17678467421767846737-43386978948-1080pnbcnews.jpg\")
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