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Informist, Thursday, May 7, 2026

 

By Shweta

 

NEW DELHI – Retail inflation in India is likely to have moved closer to the Reserve Bank of India's medium-term target of 4% in April, reflecting the impact of the war in West Asia. According to an Informist poll of 13 economists, CPI inflation is seen rising to a 15-month high of 3.8% in April from 3.4% in March.

 

In April 2025, CPI inflation was 3.3%, based on the new CPI series with 2024 as the base year. The statistics ministry will release inflation data for April at 1600 IST Tuesday.

 

Inflation is seen inching up mainly because of higher fuel prices, economists said. Inflation in the housing, water, electricity, gas and other fuels segment is seen rising to 3.2% in April from 1.97% in March, according to economists at Nirmal Bang Equities.

 

"CPI inflation is seen in the comfortable range, below 4%. The slight increase can be attributed to spillover from the impact of LPG price hike seen in March and vegetable prices maintaining a comfortable growth momentum," said Sakshi Gupta, principal economist at HDFC Bank.

 

Nirmal Bang estimates food and beverage inflation in April at 4.2%, up from 3.71% in March. "Prices of cereals, pulses and vegetables remain relatively benign despite unseasonal rains in March and the heatwave in April," economists at Nirmal Bang said in a note.

 

According to data from the Department of Consumer Affairs, retail prices of tomato rose 3% on month in April. While potato and onion prices fell 4?ch on month in April, edible oil prices rose around 2%.

 

Core inflation, which excludes the volatile food and fuel items, is seen rising to 3.5% in April from March's print of 3.3%, according to the poll.

 

The war in West Asia, which started on Feb. 28, has impacted the global energy supply chain and resulted in higher fuel and energy prices. A India is a major energy importer, it has been absorbing the brunt of this price hike as seen in the higher CPI inflation. So far, the government has not allowed oil marketing companies to increase retail prices of petrol and diesel and 14.2 kg cooking gas cylinders.

 

Retail consumers have so far remained relatively insulated from the energy price spike, with economists expecting a steeper rise in WPI inflation compared to CPI inflation.

 

The RBI has forecast retail inflation averaging 4.6% in FY27, with risks to forecasts on the upside. Economists see upside risks to inflation from a possible El Nino during the southwest monsoon season this year, especially if the war prolongs.

 

The India Meteorological Department has forecast the southwest monsoon this year to be below normal, at 92% of the long-period average. The last time the southwest monsoon was below 92% of the long-period average was in 2015.

 

Following is a summary of the poll on CPI inflation in April, in ascending order:

 

ORGANISATION	CPI INFLATION ESTIMATE
ICICI Securities Primary Dealership	3.5%
QuantEco Research	3.55%
IDFC FIRST Bank	3.6%
Sunidhi Securities	3.76%
Nirmal Bang Equities	3.78%
CareEdge Ratings	3.8%
HDFC Bank	3.8%
India Ratings and Research	3.9%
ICRA	3.9%
STCI Primary Dealer	3.9%
Standard Chartered Bank	3.9%
Bank of Baroda	4.0%
Kotak Mahindra Bank	4.2%

 

End

 

Edited by Avishek Dutta

 

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