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India's headline inflation to average 3.5% in FY26: Crisil
Aug-14-2025

Crisil in its research report for August has said that India's headline inflation is expected to average 3.5% this fiscal year (FY26), as compared to 4.6% in the last financial year. It said that healthy agricultural production is likely to keep food inflation in check. The kharif sowing is up a healthy 4% year-on-year as of August 8. Headline inflation is defined as a rise in prices of all items in the Consumer Price Index (CPI), including food and energy.

It stated assuming geopolitical uncertainties remain under control, Brent crude oil prices are projected to be subdued at $60 to $65 per barrel in the current financial year, which should help contain non-food inflation. Moreover, it said another bout of repo cut is expected this fiscal. A cumulative cut of 100 basis points so far, along with adequate liquidity, has ensured a swift transmission down the line.

India's retail inflation rate has more than halved over the past year, slipping even below the lower end of the Reserve Bank of India's tolerance band of 2%. It slid to 1.6% in July from 2.1% in June. The report added the sharp fall in retail inflation should buoy household purchasing power, particularly in the lower-income segments. This will create room for further monetary policy easing.  According to data released on August 12, India’s CPI-based retail inflation eased to 1.55% in July, the lowest reading since June 2017, compared with 2.10% in June.


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