Real GDP forecast

Inflation

CPI Inflation forecasts

Food Inflation

• overall increase in price of goods and services
• with decrease in people's purchasing power

Causes

1. Demand - pull :

• demand surpasses supply -> consumer willing to pay more

2. Cost - push :

• rise in production costs of goods and services -> due to increased incomes, elevated cost of raw materials, disruptions in supply chain

3. Wage - price :

• feedback loop between wage and price
• workers demand higher wages -> to offset the high labour costs, the businesses increase the cost of products -> then again labour demand more wages citing higher costs of products
• cycle perpetuates

Indices

1. Consumer price index - CPI

1. for industrial workers
2. for agricultural labourers
3. for rural labourers
4. for urban non manual employees

2. Consumer food price inflation - CFPI

• component of the broader CPI
• RBI utilises the CPI - combined
• monitors the fluctuations of certain food items that is commonly consumed by households

3. Wholesale price Food index - -WPI

• tracks the change in price of goods traded in bulk
• b2b
• services are not part of it
• in industries, manufacturing and constructions sectors
• Components: primary and others
• food articles: cereals, paddy, wheat, pulses, vegetables, fruits, eggs, milk, meat, fish.
• ! food carries 45.9% in the CPI
• non food articles: oilseeds, minerals, crude petroleum

Wholesale Inflation

• India's factory gate inflation
• measured by Wholesale Price Index (WPI)
• released by Ministry of Commerce and Industry

Manufacturing Inflation

Forex Reserves

April 2025

• India's Forex Reserves adds $6.6 Billion, now at $665 Billion

May 2026

• India's forex reserves jumped by $6.295 billion to $696.988 billion during the week ended May 8.

• The overall reserves had dropped by $7.794 billion to $690.693 billion in the previous reporting week. Business Standard

Repo Rate

Standing Deposit Facility Rate

Bank Rate

Marginal Standing Facility Rate

Sectors and their contributions to GDP

GST collection

September 2023

Inflation Rate in September, 2023 (%)

Top States/ UTs:

Rajasthan: 6.53% Haryana: 6.49% Karnataka: 6.00% Odisha: 5.87% Telangana: 5.97%

Bottom States/ UTs:

Chhattisgarh: 1.98% Delhi: 2.24% Madhya Pradesh: 3.67% West Bengal: 3.66% J&K (including. Ladakh): 3.46%

Via: India Index

November 2025

January 2026

Commercial Liquified Petroleum gas has seen a jump of Rs 111 across major cities

Latest price hike: The price of a 19 kg commercial cylinder in Delhi has jumped to Rs. 1,691.50, whereas in Mumbai it is Rs. 1,642.50, Kolkata, ₹ 1,795. In Chennai, it is ₹ 1,849.50.

Domestic LPG remains unchanged

Household consumers, however, will not be affected as the prices for domestic LPG cylinders remain unchanged.

Pricing happened on December 1st, 2025, and the rates were cut by 10 rupees.

6 reductions since 2025 April

Since April 2025, six previous reductions have together brought down the price of commercial LPG by Rs. 223 per cylinder.

ATF prices cut by 7.3%

Price of aviation turbine fuel was slashed by 7.3%. The reduction in the jet fuel price came after three rounds of monthly price hikes. The latest price cut is expected to ease pressure on airlines, for which fuel accounts for nearly 40% of the operating cost. Business Standard

Mining sector

India hardly mines. The sector contributes only 2 per cent to GDP. As a result, India spends $400 billion a year (50 per cent of its total imports) importing resources.

China's trade surplus

Balance improves with everyone, but not US

![obsidian|400][photo_2026-01-27_08-38-59.jpg]

Historic high in 2025

![obsidian|400][photo_2026-01-27_08-38-54.jpg]

• @ Trade surplus of $1.2 trillion in 2025 from $993 billion in 2024.
• Trade surplus is the country's earnings through its exports which are greater than the imports.
• China's trade surplus have been increasing significantly since 2005, and in the past two decades, it has increased ten times in size.
• China's overall trade surplus is the trade surplus with the whole world put together that has actually gone up by more than 20 percent in just one year.

US and China

• China's trade surplus with the US fell from $327 billion in November 2024 to $257 billion in November 2025.
• When a country imposes tariffs on imports, the price of those imports goes up, and the demand falls in response.
• The tariffs also hit US exports to China, which fell from $149B in 2024 to $129B in 2025.

This level of dominance creates three specific problems:

1. The problem of finances - where is the money to buy these Chinese goods come from
2. A macroeconomic problem - if China alone can make all the cars, steels and toys, what happens to the domestic producers, people and money in the other country.
3. A political one. A deep resentment against globalization, trade, and immigration.

Reason for trade surplus

• China wins because it doesn't follow the rules of the free market. It keeps its wages low and exchange rate weak to make exports cheaper.
• There are also question marks over the Chinese government's role in financing its private sector through massive subsidies.

June 2026

MPC meeting

Uncertainty persists due to West Asian conflict

• RBI Governor Sanjay Malhotra said, "uncertainty persists due to the ongoing conflict in West Asia, disruptions to key trade routes, supply chains, and increased market volatility and cautious business sentiment."

India better positioned

• "India is better positioned to deal with the current global challenges compared to previous episodes of external shocks"

Advanced economy central banks towards monetary policy tightening

• "Major advanced economy central banks are likely to pivot towards monetary policy tightening. While equity markets remain buoyant, driven by AI fueled optimism, global bond markets remains bearish amidst renewed inflation fears and continued debt sustainability concerns. "

Risks to growth and inflation

• There are considerable risks to baseline assumption of growth and inflation.

Food outlook uncertain

• Food outlook remains uncertain on account of subnormal southwest monsoon forecasts and El Nino. Business Standard

Wholesale Inflation rose to 9.68% in May, 2026

Reason

• Higher prices of
  • fuel
  • food articles
  • some manufactured goods
  • crude oil costs, due to tensions in West Asia

Major drivers

• Mineral oils, Crude petroleum and Natural gas, Chemicals and Chemical Products, Basic metals
• Fuel segment - 30.33% compared to 24.71% in April, 2026
• Fuel and Power remained largest contributor
• Within this, crude petroleum and natural gas accelerated to 61.51%
• Mineral oils recorded inflation of 49.82%

First under revised WPI series

Changes made

• new base year of 2022-23 replacing 2011-12
• Introduced new Producer Price Indices (PPIs), including Output PPI, Trial Input PPI, Service PPI for 7 services sectors.