New Delhi, 13 June (IANS). Crisil’s report released on Friday said that in view of the current trend of inflation, the headline inflation is estimated to be an average of 4 percent in FY 2026, which was 4.6 percent in the previous financial year.
The report predicted that due to low inflation, there is a possibility of cutting another repo rate in addition to the reduction of 100 basis points declared by the Reserve Bank of India so far.
The continuing decline in food inflation caused the consumer price index (CPI) based inflation to decrease to 2.8 percent in May this year, the lowest since February 2019. In April this year, CPI -based inflation was recorded at 3.2 percent.
Fuel and core inflation also softened. Food inflation declined from 1.8 percent of April to 1 percent in May, which is the lowest since October 2021. The fuel inflation reversed the trend to decrease from 2.9 percent to 2.8 percent.
Core inflation declined from 4.23 percent to 4.18 percent in May in April. The core inflation remained below its trend level (measured by decaded average) of 4.9 percent.
Foods saw deflation in pulses, vegetables and spices, while less inflation was recorded in grains.
According to Crisil Intelligence released last week, the price of both the vegetarian and non -vegetarian plates in May fell by 6 percent on an annual basis, mainly due to the low price of vegetables.
The third advance estimate of the Ministry of Agriculture has indicated a strong rabi crop with record wheat production.
The report said, “India Meteorological Department (IMD) has estimated more monsoon than normal to 106 percent of long period average (LPA). Rain will have a positive impact on the upcoming Kharif season.”
Both measures will control food inflation in this financial year, provided there is no disruption in the monsoon.
Although the monsoon speed has decreased slightly in June and the total rainfall across India has been 34 percent lower, but the rainfall in July and August matters the most for kharif crops.
According to the report, in the event of no permanent impact of geopolitical stresses on the energy front, the prices of Brent crude oil are estimated to be soft, which will be between $ 65 to 70 per barrel in the current calendar year, helping to control non-food inflation.
-IANS
SKT/
