The Reserve Bank of India’s latest Monetary Policy Statement revealed that CPI inflation rose to 4.8 per cent in August 2026, up from 4.5 per cent in July. The increase was largely driven by heightened inflation in food and fuel categories, although core inflation has also accelerated, signaling emerging breadth in price pressures. Broad-based food price increases were accompanied by significant spikes in commodities such as sugar and onion. The rise in fuel inflation during August primarily reflected adverse base effects. Core inflation advanced to 4.2 per cent, while core inflation, excluding precious metals, increased to 2.9 per cent in August. The proportion of items within the headline CPI basket registering inflation above 4 per cent steadily climbed to approximately 37 per cent in August. The near-term inflation trajectory suggests persistent pressures stemming from supply-side constraints due to the deficient monsoon, ongoing El Niño conditions, and elevated energy and commodity prices, the effects of which continue to propagate. Taking all factors into account, CPI inflation is projected at 5.2 per cent for 2026-27, with estimates for Q2 at 4.9 per cent; Q3 at 6.0 per cent; and Q4 at 5.7 per cent. Inflation for Q1:2027-28 is forecasted at 5.6 per cent, with risks deemed to be evenly balanced. Core inflation is anticipated to be 4.4 per cent for 2026-27. Available data indicates that inflation and its outlook are not as favorable as previously observed, with headline CPI inflation expected to average nearly 5.8 per cent over the next three quarters and core inflation projected at 4.4 per cent this year.