A Reuters poll of 44 economists, conducted from Sept. 3 to Sept. 9, forecast that India’s annual consumer price inflation based on the consumer price index (CPI) likely rose to 4.80% in August, up from 4.45% in July. That projected figure would mark a 20-month high and represent the third consecutive month in which inflation exceeded the Reserve Bank of India’s 4% medium-term target.
Respondents to the poll provided forecasts that ranged from 4.40% to 5.05%. The official CPI reading was scheduled for release on Sept. 14.
The poll pointed to a combination of food and fuel dynamics as the main drivers of the uptick. An erratic monsoon disrupted supplies of several staples, contributing to price increases in sugar, cereals, milk, edible oils, eggs and meat. At the same time, global crude oil prices, described in the poll as nearing $100 a barrel, and higher cooking gas prices added to inflationary pressure.
Kanika Pasricha, chief economic adviser at Union Bank of India, was quoted as saying that the expected increase in August inflation would be "primarily driven by elevated food prices together with a further rise in fuel inflation." The poll also noted that persistent year-on-year declines in the prices of potatoes and peas partially offset increases across other food categories, limiting the rise in the overall headline inflation figure.
Sugar was highlighted as a particularly notable factor. Prices reached a record high in August and were estimated to contribute at least 15 basis points to headline CPI, according to the poll. The government’s export restriction on sugar - put in place in May to cool domestic prices - was reported to remain effective through the end of September.
Despite inflation running above the 4% medium-term objective, it remained within the RBI’s official tolerance band of 2% to 6%. The central bank kept policy rates unchanged in its most recent decision, while the minutes of that meeting indicated readiness to tighten policy if price pressures became more widespread. Poll respondents did not expect the RBI to raise rates before next year.
Beyond consumer prices, the Reuters survey also projected an uptick in wholesale price inflation. The poll showed wholesale inflation edging up to 9.89% in August from 9.78% in July, keeping it close to the 10% level for a fourth successive month.
Separately noted in a prior Reuters poll was an expectation for future RBI action in 2027: a 25 basis point increase in the second quarter of 2027 followed by a further rise in the fourth quarter, which would take the policy rate to 5.75%, according to that earlier survey.
Data snapshot
- Poll sample: 44 economists (Sept. 3-9)
- Forecast CPI for August: 4.80% (range 4.40% to 5.05%)
- July CPI: 4.45%
- Core inflation (poll estimate): 4.1% in August (India does not publish an official core CPI measure)
- Wholesale price inflation (poll): 9.89% in August, up from 9.78% in July