New Delhi, April 16 || A Crisil report on Wednesday projected India's CPI inflation to average 4.3 per cent this fiscal (FY26) -- with food, fuel and core inflation at 4.6 per cent, 2.5 per cent and 4.2 per cent, respectively.
This fiscal, “we expect food inflation to remain under control given the healthy rabi sowing, soft global food prices and the expected above-normal monsoon,” said the report.
The high base of last year will provide a downward (statistical) push to food inflation. The Indian Meteorological Department has forecast an above-normal monsoon for this fiscal, which should benefit the kharif crop.
“We expect non-food inflation to remain in the comfort zone with expectations of benign global commodity prices,” said the Crisil report.
However, it is important to remain vigilant about potential heat waves and other weather-related disruptions.
"We expect the Reserve Bank of India (RBI) to cut rates at least two more times by 25 bps each this fiscal given the benign inflation amid rising downside risks to growth. We expect lower interest rates, inflation and fiscal deficit target to bring down the yield on the 10-year government security to 6.4 per cent by March 2026 from 6.7 per cent in March 2025,” the report noted.