Will Q3 CPI Inflation Reach 0.4% According to BoB Report?
Synopsis
Discover how India's retail inflation is projected to stay under control in Q3 FY26, with CPI inflation expected at 0.4%. This report from Bank of Baroda highlights the factors keeping inflation low, including food prices and core inflation stability. What does this mean for consumers and the economy?
Key Takeaways
India’s CPI inflation is projected at 0.4% for Q3 FY26.
This is lower than the RBI’s estimate of 0.6% .
Easing food prices and stable core inflation are key factors.
Retail inflation in November 2025 was 0.7% , down from 5.5% a year ago.
Food inflation remains in deflationary territory at -3.9% .
New Delhi, Dec 15 (NationPress) India's retail inflation is anticipated to remain well under control during the third quarter of FY26, with the headline CPI inflation projected to be at 0.4 percent. This figure is slightly below the Reserve Bank of India's estimate of 0.6 percent, as outlined in a report released by Bank of Baroda on Monday.
The report indicates that declining food prices and stable core inflation have provided ongoing relief to consumers, even with a minor recent increase in vegetable prices.
It was also noted that CPI inflation has stayed below the lower threshold of the RBI's target range for three consecutive months.
In November 2025, retail inflation was recorded at only 0.7 percent, a significant reduction from 5.5 percent in the same month last year.
This decline occurred despite a slightly unfavorable base effect and was lower than Bank of Baroda's own estimate of 0.9 percent.
Food prices have been a major factor contributing to lower inflation, with food inflation remaining in deflationary territory at -3.9 percent in November, although the rate of decline has slowed compared to October.
There have been substantial price decreases in vegetables and pulses, with vegetable inflation at -22.2 percent and pulses at -15.9 percent, driven by improved production and higher market arrivals.
According to the report, five out of ten major food items are still experiencing inflation below 4 percent.
While food inflation has shown some sequential increases, particularly in vegetables and eggs due to seasonal factors, Bank of Baroda reassured that this is not a significant concern.
On a month-on-month basis, the consumer food price index rose by 0.5 percent in November, both in adjusted and unadjusted terms, suggesting limited seasonal pressure.
The report also highlighted that the prices of tomatoes, onions, and potatoes have seen some upward movement in early December, with tomato prices increasing 5.5 percent year-on-year in the first 11 days.
However, on a cumulative basis, the prices of these essential vegetables are still down by nearly 25 percent, which is expected to continue exerting downward pressure on overall inflation.
Point of View
It's crucial to adopt a balanced perspective on the recent CPI inflation report. While the figures suggest a positive trend in controlling inflation, the focus must remain on monitoring the market dynamics and ensuring that consumer interests are prioritized to maintain economic stability.
NationPress
11 May 2026
Frequently Asked Questions
What is the expected CPI inflation for India in Q3 FY26?
The expected CPI inflation for India in Q3 FY26 is 0.4%, according to the Bank of Baroda report.
How does this projection compare to the Reserve Bank of India's estimate?
The projection of 0.4% is slightly lower than the Reserve Bank of India's estimate of 0.6%.
What factors are contributing to the low inflation rate?
Easing food prices and stable core inflation are major factors contributing to the low inflation rate.
How did retail inflation perform in November 2025?
Retail inflation in November 2025 was recorded at 0.7%, a significant drop from 5.5% in November of the previous year.
What is the current situation regarding food prices?
Food prices are in deflationary territory, with food inflation at -3.9% in November, indicating a decline in food costs.
