Inflation has ceased to be a concern, with the third quarter figures likely to undershoot the Monetary Policy Committee’s projection of 1.8 per cent made in October. With the October retail inflation coming in at just 0.25 per cent, both November and December will have to come up with an inflation print of 2.6 per cent for this projection to come true. The GST cuts are likely to lower core inflation (now at about 4 per cent, amidst low headline inflation). The high base effect, although less than in October, could also suppress the inflation print. Even if the MPC’s projection of 4 per cent in Q4 is realised as the base effect recedes, inflation for FY26 may fall short of MPC’s 2.6 per cent for FY26. This strengthens the case for a repo rate cut when the MPC meets early next month.

The re

See Full Page