India’s CPI inflation may average around 5 per cent in FY27, according to a research report by the State Bank of India, which said inflation is expected to remain elevated during the middle of the fiscal before easing later.
The central bank is expected to maintain a prolonged pause in interest rates as a stable rupee and improving foreign inflows help keep broader price pressures under control, it said.
The central bank is expected to maintain a prolonged pause in interest rates as a stable rupee and improving foreign inflows help keep broader price pressures under control, the report noted.
“Understanding the imported inflation component and calibrating it against the exchange rate dynamics thus assumes significance,” the report said, expecting “a prolonged pause in rates in FY27”.
The report comes after headline CPI inflation rose to 4.38 per cent year on year (YoY) in June this year from 3.93 per cent in May. Core inflation, as per the new classification, also rose to 4.21 per cent.
Inflation increased in both rural and urban India, with rural CPI rising to 4.74 per cent and urban inflation to 3.92 per cent in June, the report added.
Fibre2Fashion News Desk (DS)
