Standard Chartered has revised upwards its forecast for India’s consumer price inflation in FY27 to 4.9%, citing sustained food and fuel price pressures that may challenge monetary policy stability.
Standard Chartered has lifted its forecast for India’s consumer price inflation in fiscal 2027, saying the outlook has worsened as food and retail fuel costs stay firmer than expected. The bank now sees CPI inflation at 4.9%, up from 4.5%, and expects food and beverage prices to rise 6.3% over the year. It also scrapped an earlier assumption that retail fuel prices would fall by about 2% in September.
The revised call points to broader price pressure across the economy, although the bank said the impact on core inflation, which strips out volatile items, is limited. In its latest note, Standard Chartered said quarterly inflation estimates for FY27 have been marked up to 4.8% for the second quarter, 5.8% for the third and 5.3% for the fourth, mainly because of food risks. The bank added that the price outlook may improve if food conditions stabilise, but warned that any further jump could keep inflation elevated for longer.
The warning comes as India’s central bank has already turned more cautious. The Reserve Bank of India recently raised its own FY27 inflation forecast to 5.1% from 4.6% and kept the repo rate unchanged at 5.25%, while maintaining a neutral policy stance. Governor Sanjay Malhotra has pointed to risks but said foodgrain stocks provide some comfort. Other recent assessments have also pointed to firmer inflation in FY27, though estimates vary, with the Economic Survey expecting inflation to remain within the RBI’s target and Nomura, Crisil and others projecting readings in the mid-4% range.
For the moment, Standard Chartered expects the Monetary Policy Committee to stay on hold through FY27. Even so, it said a rise of 50 basis points or more cannot be ruled out if food prices accelerate further. That would mark a notable shift from the disinflation trend that policymakers had previously expected, and suggests the next phase of India’s inflation fight may depend heavily on weather, food supplies and fuel costs.
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