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India’s CPI likely to be above 3.5 per cent in FY26: ICRA
Jun-19-2025

Rating agency ICRA has said that India's Consumer Price Index (CPI) is expected to be above 3.5 per cent, while the Wholesale Price Index (WPI) will be over 1.8 per cent for the current fiscal (FY26). It said India’s real GDP (Gross Domestic Product) growth for 2025-26 will be 6.2 per cent, down from 6.5 per cent in the preceding financial year. Real Gross Value Added (GVA) growth is also expected to ease to 6 per cent from 6.4 per cent. 

It has forecast the fiscal deficit to be 4.4 per cent of GDP for 2025-26, with the current account deficit projected at 1.2 per cent to 1.3 per cent during the same period. According to it, rural demand is likely to remain upbeat, aided by Rabi cash flows and above-normal reservoir levels. It also said that the combination of the sizeable income tax relief in the Union budget for 2025-26, rate cuts leading to lower EMIs and moderation in food inflation is expected to boost household disposable incomes. It said that the tepidness in India’s merchandise exports is expected to continue in the near term.

Moreover, it said services exports are likely to outpace merchandise export growth. The Centre’s capital expenditure is budgeted to rise by 10.1 per cent in 2025-26, which will boost investment activities. However, private capital expenditure may gain some traction on the face of a muted outlook for exports and uncertainty around trade policies.


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