India’s CPI inflation rose further in Dec-25 to 1.33%YoY from 0.71% in Nov-25.
Download ReportQuantEco Research | Dec-25 CPI inflation - Hitting the bulls eye! Now on to new CPI series
India’s CPI inflation at 1.33%YoY in Dec-25 from 0.71% in Nov-25 marked the second successive month of inflation up-move. (Recall, CPI inflation had fallen to a record low of 0.25% in Oct-25). The Dec-25 print was exactly in line with our expectations, though marginally below market consensus pegged at ~1.5%. It was also the last reading in the current inflation series.
With the trough of inflation behind us, Q4 FY26 (and beyond) could see CPI inflation move upwards owing to a variety of reasons, as we discuss in the note below. The late kicking in of winter seasonality in food price as well as a healthy sowing in the ongoing Rabi season should keep a lid on the upward momentum in Q4 FY26. As such, for FY26, we continue to hold on to our CPI inflation estimate of 2.1% and introduce our FY27 estimate at 3.9%. We will keep monsoon performance (assumed to be normal), weather shocks as well as global crude oil prices on close watch.
As we bid adieu to this series, we eagerly await the release of the new CPI series from Feb-26. As per our assessment, weight of Food & beverages could ease to 40-42% while that of Miscellaneous could go up to 35% in the new series. This might make the new CPI series a tad less volatile. Any comparison between old and new series however, may have to wait until backdated CPI index is made available by NSO.