GST: According to a recent research, the goods and services tax (GST) decrease is anticipated to lower consumer price index (CPI) inflation by about 25 basis points over the September–November 2025 period and may lower it by 35 basis points during current fiscal year (FY26).

According to the State Bank of India (SBI) report, projections for Q1 FY27 inflation were reduced by almost 100 basis points, from 4.9% to 3.9%. It also said that the Q3 FY26 forecast was changed from 0.6% to 3.8%.

SBI projected inflation for FY26 at 1.8% and FY27 at 3.4% due to continuing reduced food inflation, increased kharif output, healthy rabi sowing, sufficient reservoir levels, and favorable soil moisture.

In its December policy, the Reserve Bank of India (RBI) lowered its forecast for FY26 inflation from 2.6% in October and 4.2% in February to 2%.

The RBI has left the door open for future rate changes, but it anticipates that the repo rate of 5.25% would remain lower for an extended period of time, the report stated.

Due to a minor slowdown in food and beverage prices as well as greater fuel and light inflation at 2.32 percent, the CPI inflation trend reversed and slightly increased to 0.71 percent in November from 0.25 percent in October.

Although the price of several products decreased in November, the price of personal care and effects rose as a result of rising gold prices.

The paper pointed out that while the data fluctuates regularly, the current inflation data reveals erratic tendencies, sometimes with rural food deflation decreasing or urban food inflation increasing, led by cereals, milk products, non-alcoholic drinks, prepared meals, snacks, etc.

According to the data, headline CPI was negative at -0.12% YoY, while gold inflation remained high at 58%.