New Delhi, Dec. 2 -- The Monetary Policy Committee's decision on the repo rate later this week will be a complicated one. Inflation has receded much faster than the central bank's forecasts. The October Consumer Price Index inflation print, at 0.25% year on year, has come at a series low.

The Reserve Bank of India's forecast for average CPI inflation for 2025-26 has been revised lower by 160 basis points in just eight months from 4.2% in February to 2.6% in October. Another large downward revision later this week looks imminent, potentially taking the forecast closer to the central bank's lower tolerance band of 2%.

On the other hand, GDP growth continued to spring large upside surprises to average 8% in the first half of 2025-26 and lo...