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Informist, Wednesday, Sept. 9, 2026

 

By Radhika Tiwari and Shweta

 

NEW DELHI – India's headline inflation, based on the Consumer Price Index, is likely to rise to a 20-month high in August, driven by higher food prices due to a weak monsoon and rising fuel prices amid an escalation in the US-Iran war.

 

Retail inflation, based on the CPI (Combined), is expected to be 4.8% in August, according to the average of estimates in an Informist Poll of 12 economists. The estimates range from 4.5% to 5.0%, with some economists expecting upside risks to their projections.

 

At 4.8%, it would mark the third consecutive month of inflation above the Reserve Bank of India's medium-term target of 4%. CPI inflation was at 4.45% in July and 2.01% in August last year. The statistics ministry will release inflation data for August at 1600 IST Monday.

 

Economists see a rise in CPI inflation because of a weak monsoon, resulting in a broad-based rise in food prices. "It (food inflation) is spread across proteins, sugar, processed food and a few vegetables such as onions," Gaura Sen Gupta, chief economist at IDFC FIRST Bank, said. "The rise in food prices is likely to be led by a 10-15% increase in sugar prices, with prices of cereals, milk and eggs, oils and fats, and meat also seeing a sustained uptick," Teresa John, economist at Nirmal Bang, said in a note.

 

HDFC Bank expects food and beverages CPI inflation to rise to 5.7% in August from 5.24% in July. According to data from the Department of Consumer Affairs, retail onion prices jumped 17.3% month-on-month in August, sugar prices rose 15.2%, and edible oil prices rose 1% from the previous month. 

 

The sharpest increase was in sugar prices amid reports of weather-related impacts on production, reduced global supplies, and rising festive demand, Dipanwita Mazumdar, economist at Bank of Baroda, said in a note.

 

Potato prices remained unchanged on a sequential basis, while tomato prices fell 7.2% in August. "Some course corrections in vegetable prices were comforting, especially at a time when weather-related uncertainties posed considerable risk to supply-side dynamics," Mazumdar said.

 

Food prices have risen as south-west monsoon rainfall has remained deficient so far this season. India received 603.7 millimetres of rainfall during Jun-Aug, 14?low the normal of 700.7 millimetres for the period, according to the India Meteorological Department.

 

Core inflation, which excludes food and fuel items, is expected to rise to 4.1% in August from 3.9% in July, according to the poll. Economists expect core CPI inflation to rise on higher gold and silver prices. Excluding gold, silver, petrol, and diesel, core inflation is expected to be below 3% in August, according to economists. Core inflation excluding precious metals remains low, reflecting limited pass-through of price pressures to consumers, Gupta said.

 

For the full year, retail inflation is estimated at 5.0%, in line with the RBI's projection, according to the poll.

 

The following is a summary of the poll on CPI inflation in August, in descending order:

 

ORGANISATION	CPI INFLATION ESTIMATES
Bank of Baroda	5%
ICICI Bank	4.97%
Nirmal Bang Equities	4.9%
STCI Primary Dealer	4.9%
IDFC FIRST Bank	4.9%
Sunidhi Securities	4.86%
Motilal Oswal	4.8%
Kotak Mahindra Bank	4.8%
HDFC Bank	4.79%
ICICI Securities Primary Dealership	4.7%
ICRA	4.6%
India Ratings and Research	4.5%

 

End

 

Edited by Saji George Titus

 

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