Editor’s Note
The government’s latest Economic Survey indicates that inflation is projected to remain manageable in the coming fiscal year, supported by favorable supply conditions and policy measures. While the outlook is positive, potential risks such as exchange rate volatility warrant continued monitoring.
According to the Economic Survey presented in Parliament, inflation is not expected to be a major concern in the next fiscal year. The inflation scenario remains soft due to favorable supply-side conditions and the gradual benefits of GST rate rationalization.
Looking ahead, strong agricultural production, stable global commodity prices, and continued policy vigilance are expected to keep inflation within the targeted range. This is a favorable sign. However, risks related to exchange rate volatility, spikes in base metal prices, and global uncertainties persist. These conditions will require continuous monitoring and timely policy responses.
The survey stated that gold and silver prices could continue to rise until lasting peace is established and trade wars are resolved. Demand for these metals as safe-haven investments remains strong during times of global uncertainty.
The survey also noted that India’s inflation rate in the fiscal year 2026-27 could be higher than in 2025-26. Nevertheless, inflation is not anticipated to become a major worry.
According to the survey, the Reserve Bank of India (RBI) and the International Monetary Fund (IMF) have projected a rise in headline inflation for the next fiscal year. At the same time, the inflation level is expected to remain within the targeted range of four percent (with a tolerance band of +/- two percent). The IMF has projected an inflation rate of 2.8 percent for FY 2025-26 and four percent for FY 2026-27. According to the RBI, inflation for the first and second quarters of FY 2026-27 could be 3.9 percent and four percent, respectively.
