New Delhi, June 13 || Given the current inflation trajectory, headline inflation is projected to average 4 per cent this fiscal (FY26), from 4.6 per cent last fiscal, a Crisil report said on Friday.
Lower inflation keeps the window open for one more repo rate cut by the Reserve Bank of India (RBI), apart from the 100 basis points cut announced so far, the report forecast.
The Consumer Price Index (CPI)-based inflation dropped to 2.8 per cent in May, the lowest reading since February 2019, from 3.2 per cent in April as food inflation continued to decline.
Fuel and core inflation also softened. Food inflation fell to 1 per cent, the lowest since October 2021, from 1.8 per cent in April. Fuel inflation reversed trend and eased marginally to 2.8 per cent from 2.9 per cent.
Core inflation eased to 4.18 per cent from 4.23 per cent in April. Core inflation remained below its trend level (measured by the decadal average) of 4.9 per cent.
Among food items, pulses, vegetables and spices saw deflation, while cereals recorded lower inflation.
According to Crisil Intelligence—Research’s Thali Index released last week, the cost of both vegetarian and non-vegetarian thalis in May fell 6 per cent each on-year largely due to lower vegetable prices.
The Ministry of Agriculture’s Third Advance Estimates has indicated a robust rabi harvest with record wheat production.