Standard Chartered strategists have revised their forecast for India's Consumer Price Index (CPI) inflation in FY27, increasing it to 4.9% from the previous estimate of 4.5% due to higher food and retail fuel prices [1]. The bank now anticipates broader price pressures across the economy, excluding gold and silver, with the food and beverage CPI specifically projected at 6.3% [1]. Quarterly CPI projections for FY27 have also been adjusted upward, with Q2-FY27 forecasted at 4.8% (previously 4.3%), Q3-FY27 at 5.8% (previously 5.1%), and Q4-FY27 at 5.3% (previously 4.9%), primarily driven by increased food price risks [1].
Standard Chartered noted that the upward revision in the FY27 core CPI forecast is marginal, as the impact of removing the previously assumed 2% retail fuel-price cut in September has been partially offset by lower gold prices to date [1]. The strategists expect the Monetary Policy Committee (MPC) to maintain the status quo in FY27, but they caution that there is a risk of a rate hike of 50 basis points or more if food prices continue to rise [1].
No specific market reactions or analyst opinions beyond Standard Chartered's outlook were mentioned in the article [1].
CONCLUSION
Standard Chartered's upward revision of India's FY27 inflation forecast highlights persistent risks from food and fuel prices. While the MPC is expected to hold rates steady, the possibility of further hikes remains if inflationary pressures intensify.