New Delhi, Nov 12 : Economists on Wednesday said the further softening of the CPI inflation for the month of October is owing to the government's prudent GST reforms, which are showing a favourable impact on the economy.

The year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of October stood at 0.25 per cent (provisional).

â??The record-low food inflation of the current CPI series at -5.02 per cent (provisional) is the major contributor to lowest headline inflation of the current CPI series,â?? said Rajeev Juneja, President, PHDCCI.

To further bolster the impact of this period of low inflation, thrust should be laid on building infrastructure and logistics projects, strengthening agriculture supply chains to avoid food price spikes, and prioritizing technology-driven productivity gains in manufacturing and services, he added.

According to Dr Ranjeet Mehta, CEO and Secretary General, PHDCCI, over the next two quarters, â??we anticipate that India's inflation will stay within a manageable range on the back of sufficient food supply, reasonable energy prices, and Reserve Bank of India's strategic monetary managementâ??.

According to Rajani Sinha, Chief Economist, CareEdge Ratings, the CPI inflation continued to stay on a downward trajectory easing to 0.3 per cent in October, which is in line with our expectations.

â??The positive impact of the GST rationalisation and deflation in the food and beverages category supported the lower inflation print. Deflation in the food basket deepened further to 3.7 per cent in October from 1.4 per cent last month,â?? said Sinha.

Overall, economists expect food inflation to stay at moderate levels on the back of healthy agricultural activity and a favourable base.

Furthermore, adequate reservoir levels, and strong kharif sowing bode well for food price stability.

â??Going forward, inflation is projected to average 0.9 per cent in Q3 before rising to 3.1 per cent in Q4 FY26. With food inflation subdued, we project average inflation for FY26 at 2.1 per cent,â?? Sinha noted.

Aditi Nayar, Chief Economist, ICRA Ltd, said that the RBI MPC is likely to pare its CPI inflation projection for FY2026 further from 2.6 per cent (as mentioned in October 2025 meeting), driven by the soft sequential momentum in food prices as well as the impact of the GST rate rationalisation on several items in the CPI basket.

â??This, along with the dovish tone of the October 2025 policy document, would support a 25-bps rate cut in the December 2025 policy review, unless Q2 FY26 GDP growth surprises on the upside,â?? Nayar mentioned.

/IANS