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Informist, Tuesday, Feb. 10, 2026

 

By Shubham Rana

 

MUMBAI – Retail inflation in India likely rose to an eight-month high of 2.5% in January, based on the old CPI series with 2012 as the base year, according to an Informist poll of 11 economists. Inflation is expected to have risen last month because of the statistical effect of an unfavourable base and higher gold prices, economists said.

 

This would be the first time since August that retail inflation is above the lower end of the Reserve Bank of India's tolerance band of 2-6%. Inflation, however, is seen staying below the RBI's medium-term target of 4% for the 12th month in a row.

 

Inflation was 1.33% in December and 4.26% in January 2025. Economists' estimates for January CPI inflation range from 1.5% to 2.8%. The statistics ministry will release CPI data for January as per the new CPI series with 2024 as the base year at 1600 IST Thursday. Retail inflation is seen at 2.8% in January, as per the new CPI, according to a separate Informist poll.

 

The base effect in January is such that if the general index remains unchanged from December, CPI inflation would still rise to 2.4%. The general index had declined 1% on month in January 2025.
 

An inflation of 2.4% in January would translate to a 0.1% rise in the overall index from December. Historically, the general index has declined 0.2% on month in January over the last 12 years.

 

Food and beverages inflation is seen rising in January to between (-)0.5% and (-)0.1% from (-)1.9% in December. According to data from the Department of Consumer Affairs, retail prices of onions rose 4% on month in January while prices of tomatoes and potatoes were down 7% and 8%, respectively.

 

"Inflation in cereals and pulses is expected to remain benign in January, supported by comfortable buffer stocks, stable procurement operations, and favourable rabi sowing conditions," Union Bank of India said in a report. "Sequentially, pulses inflation, in our opinion, edged down from last month and stayed negative."

 

Core inflation--which excludes food and fuel items--is seen rising to around 5% in January on the back of higher gold prices. Core inflation rose to a 28-month high of 4.6% in December, driven largely by a surge in gold and silver prices. Gold inflation hit a record 68.7% and silver inflation jumped 97.1% in January.

 

Core inflation excluding gold likely stayed muted at around 2.5% in January, "indicating subdued underlying price pressures", economists at Union Bank said.

 

The following is a summary of estimates for CPI inflation in January based on the old CPI series:

 

ORGANISATION	CPI INFLATION ESTIMATE
Moody's Analytics	1.5%
Union Bank of India	2.09%
HDFC Bank	2.35%
India Ratings and Research	2.5%
CareEdge Ratings	2.5%
ICRA	2.5%
Nirmal Bang Equities Pvt. Ltd.	2.5%
IDFC FIRST Bank	2.6%
ANZ Bank	2.7%
YES Bank	2.7%
STCI Primary Dealer	2.8%

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Rajeev Pai

 

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