India's CPI inflation rose to 4.8% YoY in Aug-26 from 4.5% in Jul-26, a 20-month high and the third consecutive print above the 4% target
Download ReportQuantEco Research | CPI Inflation | Aug-26 | The ascent continues
In line with expectations, India's CPI inflation rose to 4.8% YoY in Aug-26 from 4.5% in Jul-26, a 20-month high and the third consecutive print above the 4% target. The pickup was broad-based across all three legs: food and beverages inflation climbed to 5.7% YoY, consolidated fuel firmed to 5.2% YoY on an adverse base, and core inflation touched 4.2% YoY on the lagged pass-through of elevated input costs. Even so, price pressures are not yet generalized — the median item is inflating at 2.9% YoY, 38% of the basket sits below 2%, and core-core remains benign at 2.9%. However, the headline trajectory is expected to steepen further: the GST rate-cut base drops out from Sep-26, the monsoon deficit is tracking wider than the 10% forecast by IMD, and Brent is running well above our FY27 range of USD 80-85 pb. We expect inflation in the 5-6% range in the near term and retain our FY27 CPI forecast of 5.1% (FY26: 2.1%), with the balance of risk now tilting to the upside.