FY27 Consumer Inflation Likely To Touch 4.3%, Up From 2.5% In FY26: Crisil Report

New Delhi, Feb 19 (KNN) Consumer inflation in India is projected to rise to 4.3 per cent in fiscal 2027 (April 2026–March 2027), up from an estimated 2.5 per cent in fiscal 2026, according to a report by Crisil.

The increase is expected as food inflation normalises from current low levels due to a low base effect. While food prices are likely to remain broadly stable on the assumption of a normal monsoon in 2026, the base effect will push food inflation higher than in fiscal 2026.

Impact of Revised CPI Series

The report notes that the revised Consumer Price Index (CPI) series, with 2024 as the base year, will moderate the rise in inflation. The weight of food in the CPI basket has declined to 36.75 per cent from 45.86 per cent earlier, limiting the impact of food price movements on headline inflation.

Core CPI weight has increased to 57.89 per cent from 47.3 per cent, strengthening its influence. Core inflation rose faster than headline inflation in the first nine months of fiscal 2026, driven by a spike in gold and silver prices. 

However, with a high base and expectations of benign global oil and commodity prices, core inflation is likely to remain moderate in fiscal 2027.

Food inflation volatility may also decline under the revised CPI structure, as highly volatile items such as tomato, onion and potato have a slightly lower weight in the new basket.

Recent Trends and Policy Outlook

Inflation under the revised CPI series rose to 2.75 per cent in January from 1.17 per cent in December 2025. Average CPI inflation in fiscal 2026 (up to January) stands at 1.8 per cent, compared with 4.9 per cent in the same period last year. The recent uptick has been driven by food and gold prices.

Crisil said the projected inflation trajectory would allow the Reserve Bank of India’s (RBI) Monetary Policy Committee to maintain its pause on the repo rate and focus on transmitting the cumulative 125 basis points rate cut implemented in calendar year 2025.

(KNN Bureau)