Standard Chartered has upgraded its inflation outlook for India into 2026-27, citing ongoing food and core inflation that challenge the Reserve Bank of India’s target, with risks driven by currency depreciation and global bond yields.
Standard Chartered has lifted its inflation outlook for India into fiscal 2026-27, saying price pressures are likely to stay elevated for longer than it had previously expected. The bank’s latest note points to persistent food inflation and sticky core inflation, keeping consumer prices above the Reserve Bank of India’s 4% medium-term target for an extended period, according to the material cited by BitcoinWorld and FxStreet.
In a more specific update reported by FxStreet, Standard Chartered economists Anubhuti Sahay and Saurav Anand raised their FY27 consumer price inflation forecast to 4.9% from 4.7%. They said the change reflected higher inflation risks tied to rupee depreciation and global bond yield pressures, and they now expect the RBI to deliver a 50 basis-point rate increase to 5.75% in FY27, starting in June.
The broader policy backdrop is also moving in a more inflationary direction. Reuters-linked reporting cited by Rediff said the RBI has increased its own FY27 retail inflation forecast to 5.1%, pointing to surging fuel costs and higher input expenses across industries. The report said petrol and diesel prices had risen sharply since May, adding direct pressure to headline inflation and raising the risk of second-round effects.
That matters for growth as well as borrowing costs. Business Standard reported that S&P Global Ratings expects India’s economic expansion to slow to 6.6% in FY27, citing energy stress and the risk of a weaker-than-normal monsoon. Meanwhile, Economic Times reporting based on SBI Research suggested CPI inflation may average about 5% in FY27, with a stable rupee and foreign inflows helping to limit some of the pressure. Together, the forecasts suggest inflation is unlikely to return to target quickly, leaving the RBI with limited room to ease policy.
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