The first of the 2024 CPI series was released today. As per the new CPI series with 2024 as the base year, CPI inflation for Jan-26 stands at 2.75%YoY compared to 1.33% in Dec-25 (as per the 2012 series, though strictly not comparable). This was broadly in line with QuantEco’s expectation of 2.9%, but higher than market consensus expectations (median Reuters poll of 2.4%). Looking at, Dec-25 (2012 series) and Jan-26 CPI prints (2024 series), one can say that there appears to be continuity, and not a structural break. This comes as a relief, since the new series is structurally different from the old one.

However, the debut of the new CPI series at this point remains a ‘cameo’. This is because scope for meaningful insights from the new series remains limited at this stage, as only a single annualized observation is available, both at the headline and disaggregated levels. In addition, item-level weights are yet to be released, which constrain the ability to compute core-core, consolidated fuel, and other key derived indicators for the time being.

Looking ahead, even as food prices are expected to remain broadly benign in the short term, their relatively lower weight in the 2024 base moderates their dampening impact on headline inflation. Conversely, stronger domestic demand conditions, the pass-through from rupee depreciation, and firming of global commodity prices - combined with higher weights assigned to core goods and services are likely to exert upward pressure on headline CPI through FY27. Accordingly, we retain our FY27 CPI inflation forecast at 3.9% (attach a mild upside bias though), pending further data clarity under the revised framework.