SBI Predicts Record-Low CPI Inflation in July; FY26 Estimate Cut to 3%

India’s consumer price inflation (CPI) could hit an all-time low in July 2025, according to the latest report from the State Bank of India (SBI). The bank anticipates that inflation during FY26 will remain significantly below the RBI’s projected levels. The ease in inflation comes on the heels of a 50 basis points rate cut by the RBI during its June policy review. With price pressures easing, SBI notes that the Reserve Bank Of India is now focusing on growth prospect. 

CPI Inflation May Touch Its Lowest 

This report suggests that July’s Consumer Price Index (CPI) inflation figures could set a new record. “We believe that the upcoming July 2025 CPI inflation data is set to breach the lowest ever historical print.”

For the full fiscal year, SBI expects CPI inflation to average between 3.0% and 3.2%, sharply lower than the RBI’s forcast of 3.7%, and a significant drop from the 4.6% average recorded in FY25.

According to the report, “With benign inflation expectations in place, the central bank is now focusing on supporting capital formation to ensure more durable and sustained growth.”

The report also highlights the RBI’s data-driven approach to policy decisions. It highlighted the decision taken by the Monetary Policy Committee (MPC), which, in its latest resolution, emphasised that future monetary moves would be taken on the basis of evolving economic data. The goal remains to strike a balance between growth and inflation.

While the inflation trend appears comfortably low for now, SBI warns that external risks—such as trade disruptions and volatile commodity prices—still linger. However, the bank hinted that another rate cut might be on the cards to further bolster economic momentum.

As the report states “The plot seems to be spiced with a further 25 bps rate cut (sooner than later) to give an adrenaline boost to the economic juggernaut as global developments necessitate us to build today for future.”

CPI Inflation In Recent Months

In June 2025,  CPI inflation stood at 2.10%, a sharp drop from 2.82% in May 2025 and far below 5.08% in June 2024. This 77-month low adds weight to SBI’s projection that July may break historical records.

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(Inputs From ANI)