core inflation

Rising fuel prices are poised to reignite inflation, a Crisil report warns. Expect higher costs for transport, logistics, and manufacturing, directly impacting food and consumer goods. Direct fuel price hikes could add nearly 48 basis points to inflation, with broader effects on supply chains. While GST cuts offer some relief, persistently high oil prices remain a concern for the economy.

The RBI maintained the repo rate at 5.25% amidst economic slowdown fears and rising inflation risks from the West Asia conflict. Governor Sanjay Malhotra signaled concern over generalized inflation, cutting the FY27 growth forecast to 6.6% and raising inflation projections to 5.1%.

Asian markets rallied Friday, buoyed by hopes of US-Iran peace talks, though volatile oil prices and Strait of Hormuz concerns fueled inflation worries. Tokyo led gains as investor sentiment improved. Despite diplomatic optimism, rising crude prices prompted reassessment of global interest rate expectations, with the US Federal Reserve potentially hiking rates later this year.

Retail inflation edged up to 3.5% in April, driven by a rise in food prices. While fuel inflation slowed, restaurant services saw a significant price jump due to higher LPG costs. Consumer durables like cars and air conditioners, however, became cheaper. Experts note upside risks to the inflation outlook despite the softer-than-expected reading.

US inflation surged in April, reaching a three-year high driven by escalating fuel costs linked to the Iran-US conflict. This rise complicates the Federal Reserve's interest rate decisions, as petrol prices have significantly increased, impacting household budgets and raising concerns about broader economic fallout.

Retail inflation in India rose to 3.4% in March, driven by higher food and fuel prices. While core inflation remained subdued, economists anticipate further price increases in the coming months due to the West Asian crisis and potential impacts of heatwaves and monsoon forecasts on food prices.

Trump is attempting to rebuild his tariff regime using alternative legal avenues after the court ruled that his earlier reliance on emergency powers to impose duties was unconstitutional.

Global oil markets face turmoil due to the Iran-US conflict and Strait of Hormuz disruptions. India, heavily reliant on oil imports, feels the pinch through rising inflation and borrowing costs. The Reserve Bank of India monitors the situation, opting for stability over aggressive action. Households may experience a gradual tightening of budgets as costs rise and monetary easing is delayed.

Food inflation, based on the All India Consumer Food Price Index (CFPI), was 3.87% (provisional) for March 2026 on a year-on-year basis. The rate was slightly higher in rural areas at 3.96%, compared to 3.71% in urban regions.

According to RBI governor Malhotra, high frequency indicators till February, 2026 suggest the continuation of strong momentum in economic activity. Growth impulses continue to be supported by robust private consumption and investment demand.

Finance Minister Nirmala Sitharaman highlighted India's strong debt management, with an 81% debt-to-GDP ratio, positioning it favorably among major economies amidst global economic volatility. The ongoing Middle East conflict poses a systemic threat to global energy, impacting supply chains and economic stability, while the RBI's MPC begins deliberations amid inflation concerns.

CII hopes that the RBI would not wait for the next quarterly review but intervene sooner if the economic condition warrants a mid-course correction.

The minutes of the February MPC highlighted internal members’ elevated concerns on core inflation while a few members were concerned about overtightening. Most members, however, expressed comfort on the growth front.

The Australian Bureau of Statistics reported a 1.0% increase in the consumer price index for the June quarter, aligning with predictions. The annual CPI inflation rate hit 3.8%. core inflation rose 0.8%, falling below expectations. The Reserve Bank of Australia maintained interest rates at 4.35% due to concerns over the labor market and economic stagnation.

The low volatility of the Indian rupee relative to peer currencies limits the impact of imported price pressures and other global spillovers.

Despite rising industrial metal prices, India's core inflation outlook remains positive. Significant factors like a stable rupee, declining energy prices, and a normal monsoon suggest a supportive inflation environment, although global market uncertainties such as trade policies and commodity price changes could still create challenges.

US inflation eased in March, driven by lower petrol, air travel, and hotel costs, offering consumers some relief amid trade war anxieties. The annual consumer price increase slowed to 2.4%, with core inflation also weakening. Experts caution that President Trump's tariffs could reverse this trend, potentially raising prices on imported goods and impacting consumer spending.

The brokerage expects the recent sharp drop in wholesale price inflation to feed into Consumer Price Inflation (CPI fuel) and CPI core goods inflation with a lag.