India’s headline inflation expected to hit 4.88% in August on food, fuel pressures: Report

New Delhi [India], September 6 (ANI): India’s headline retail inflation is expected to accelerate to 4.88 per cent in August from 4.44 per cent in July, driven by persistent food price pressures and a further rise in fuel inflation, according to a report by Union Bank of India. 

“We expect India's Consumer Price Inflation (CPI) to rise to 4.88% in August' 26 from 4.44% in July, marking the second consecutive monthly acceleration and highest reading in the 23-24 series,” the report said. 

Food inflation is projected to rise to 6.03 per cent in August from 5.24 per cent in July, driven by continued price pressures across key food items. However, the composition of food inflation is expected to shift, with vegetable inflation projected to moderate sharply to 0.39 per cent year-on-year. This decline is likely to be offset by continued price increases in other essential food categories.

Sugar inflation is expected to rise sharply to 11.53 per cent month-on-month in August 2026, its highest level on record, following an estimated 15 per cent increase in sugar prices during the month. 

As per Union Bank, price trends from the Department of Consumer Affairs indicate broad-based increases across several categories, with sugar, vegetables, cereals and edible oils witnessing continued upward price movements, while pulses and milk prices remained largely firm.

At the same time, “milk inflation is expected to strengthen in the next couple of months following the recent upward revisions in retail milk prices across several states,” while cereal inflation likely rose further to “2.2%, while pulses inflation increased to 2.7%,” which can be attributed to tight domestic supplies and persistent pricing pressure. 

“Consequently, CPI excluding vegetables is expected to rise further to 5.11%,”it said, adding “Core inflation has likely increased to 4.30% from 4.15% last month while Core ex precious metals and auto fuels is also likely to inch up to 2.70% in August’26.” (ANI)

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