Retail inflation in Odisha declined sharply to 0.1 per cent during April–December 2025-26, significantly lower than the 6.0 per cent recorded in the previous year and well below the all-India average of 1.7 per cent, reflecting a sharp easing in food prices and improved supply conditions, according to the Odisha Economic Survey 2025-26.
The decline in inflation was primarily driven by falling food prices, particularly vegetables and pulses, which saw steep declines of 19.4 per cent and 16.0 per cent respectively. Overall food and beverages inflation stood at negative 2.5 per cent, while spices also recorded deflation of 3.6 per cent. Food and fuel together account for 52.7 per cent of the CPI basket, making their price movements critical in determining overall inflation trends.
The moderation in food prices was supported by favourable monsoon conditions, improved agricultural output, and strong rabi sowing, which boosted supply and eased price pressures. Government interventions, including augmentation of buffer stocks, strategic release of food grains, and supply management measures, also helped stabilise essential commodity prices.
Despite the overall moderation, certain categories recorded higher inflation. Prices of oils and fats increased sharply by 19.4 per cent, while personal care and effects rose by 11.7 per cent and education costs increased by 8.0 per cent. Fuel and light inflation remained moderate at 2.0 per cent, contributing to overall price stability.
The sharp decline in inflation has strengthened household purchasing power and supported consumption growth. Reflecting the favourable macroeconomic environment, the Reserve Bank of India described the economy as being in a “Goldilocks phase”, characterised by low inflation and steady growth, and reduced the repo rate by a cumulative 125 basis points since February 2025. The RBI has projected inflation at 2.1 per cent for 2025-26, with a gradual increase to around 4 per cent in early 2026-27.