India’s CPI inflation rose to 3.93%YoY in May-26 from 3.48% in Apr-26, broadly in line with expectations and the highest reading in four quarters
Download ReportQuantEco Research || May-26 CPI inflation - The tide is turning
India’s CPI inflation rose to 3.93%YoY in May-26 from 3.48% in Apr-26, broadly in line with expectations and the highest reading in four quarters. While inflation remains marginally below the RBI’s target, the latest print signals a clear turn in the price cycle, with pressures broadening across food, fuel and core categories. The acceleration was led by food inflation, particularly perishables, dairy and edible oils, alongside the initial pass-through of higher retail fuel prices. Looking ahead, the combined effects of fuel price adjustments, elevated global commodity and fertilizer costs, rupee depreciation, and an emerging monsoon shortfall are expected to impart further upward momentum to prices. Although ample cereal buffer stocks and some moderation in global crude oil provide limited offsets, the balance of risks remains firmly skewed towards higher inflation, with CPI expected to trend above 6.0% in H2 FY27, and averaging at 5.5% in FY27.