India: Inflation path higher into FY27 – Standard Chartered
Standard Chartered strategists have raised its FY27 Consumer Price Index (CPI) inflation forecast to 4.9% from 4.5%, citing higher food and retail fuel prices. They now expect broader price pressures, excluding Gold and Silver, with food and beverage CPI seen at 6.3%.
Standard Chartered strategists have increased their forecast for India's Consumer Price Index (CPI) inflation in FY27 to 4.9%, up from the previous 4.5%. This rise is attributed to higher food and retail fuel prices. The analysts now predict broader price pressures, with food and beverage inflation projected at 6.3%. They have also revised up their quarterly CPI forecasts for FY27, with figures of 4.8% for Q2, 5.8% for Q3, and 5.3% for Q4, driven by adjustments to food prices.
The organization anticipates the Reserve Bank of India (MPC) will keep interest rates unchanged in FY27, but warns of a potential 50 basis points or more hike if food prices continue to climb. While the upward pressure from removing the assumed September retail fuel-price cut has been partially offset by lower gold prices, the core CPI forecast for FY27 has only seen a slight revision.
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