The trajectory of future inflation will be shaped by factors such as the pass through of higher energy prices to retail prices, progress of area coverage under summer crop (which as of May 08 is showing reduction in 3 lakh hectare) and any large individual inflation movement on the negative side, according to SBI’s economic research department (ERD).

Keeping the aforementioned factors in view, the CPI for the FY27 is retained at 4.5 per cent, te ERD economists said.

Referring to India’s Consumer Price Index (CPI) inflation rising to 3.48 per cent in April 2026, up from 3.40 per cent in March 2026, SBI’s Group Chief Economic Advisor Soumya Kanti Ghosh noted that while the overall inflation rate is flat the inflation in restaurants and accommodation services increased significantly indicating the impact of LPG shortage.

“The softening of gold and silver prices led to almost 100 basis points (bps) decline in inflation rate in the personal care division. Food inflation increased to 4.01 per cent in April 2026 from 3.71 per cent in March 2026.

“Item wise data shows that within food inflation chicken, milk, refined oil, mustard oil are the major contributors. This is in line with the FAO food price index which shows a third consecutive monthly increase in April 2026. Global price indices of vegetable oils increased significantly in April 2026, followed by meat and cereals,” he said.

The ERD economists observed that the impact of war in West Asia has been key point of interest in current months CPI inflation.

Despite exchange rate fluctuations and external shocks like supply chain disruptions, the imported inflation (weight: 21.84 per cent) has not increased but decelerated slightly to 6.34 per cent in April 2026 as compared to 6.49 per cent in March 2026, they said.

“The weighted contribution of imported inflation remained flat at 1.42 per cent in April 2026. Spatial trends in imported inflation was also divergent. State-wise imported inflation reveal that in Telangana has reached 12 per cent mark in April 2026. In states like Rajasthan, Sikkim and Andhra Pradesh it is hovering around 8 per cent. There are few states also where imported inflation is less than the overall inflation,” per the Economists’ assessment.

Published on May 12, 2026