Gold, silver spike push inflation marginally higher to 3.4%
RBI sees inflation at 4.6% for FY27, warns of global energy and climate risks
image for illustrative purpose
New Delhi: India’s retail inflation, based on the Consumer Price Index (CPI) with 2024 as the base year, rose slightly to 3.4 per cent in March compared to the same month last year, according to data released by the Ministry of Statistics.
The uptick was driven largely by sharp increases in precious metal prices. Silver jewellery recorded a steep 148.61 per cent jump, while gold jewellery prices rose 45.92 per cent during the month.
Food inflation stood at 3.87 per cent in March, with mixed trends across categories. Prices of vegetables such as tomato and cauliflower increased, contributing to overall food inflation. However, several staples saw price declines. Onion, potato, and garlic recorded double-digit drops compared to a year ago. Pulses also became cheaper, with arhar (tur dal) prices falling 9.56 per cent and chickpea declining 7.87 per cent.
On a sequential basis, inflation in March was slightly higher than 3.21 per cent in February and 2.74 per cent in January, when the revised CPI series was introduced.
The Reserve Bank of India (RBI) has projected CPI inflation at 4.6 per cent for 2026-27. RBI Governor Sanjay Malhotra noted that rising global energy prices have led to increases in fuel costs, including premium petrol, LPG, and industrial diesel. At the same time, a strong rabi crop is expected to support food supply in the near term, helping contain inflationary pressures. Quarterly projections place inflation at 4.0 per cent in Q1, 4.4 per cent in Q2, 5.2 per cent in Q3, and 4.7 per cent in Q4.
However, risks remain. Elevated energy prices due to the West Asia conflict and the possibility of El Niño conditions affecting the monsoon could push inflation higher.
Core inflation, excluding food and fuel, is projected at 4.4 per cent, and remains lower when precious metals are excluded, indicating contained underlying price pressures.
