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Crisil Warns Retail Inflation May Jump to 5.1% in Current Fiscal Year

Crisil projects India's retail inflation will rise to 5.1% in the current fiscal year, up from 2% last year. The increase is driven by higher wholesale prices, elevated crude oil costs, and a weakening rupee. The West Asia conflict has already pushed wholesale inflation to 8.3% in April. The report also warns of food inflation risks due to heatwaves and a below-normal monsoon.

Key Points: Retail Inflation May Rise to 5.1%: Crisil Report

  • Retail inflation expected to rise to 5.1% from 2%
  • Wholesale inflation hit 8.3% in April due to West Asia conflict
  • High crude oil prices and weak rupee add pressure
  • Food inflation risk from heatwaves and below-normal monsoon
3 min read

Retail inflation may rise to 5.1% in current fiscal from 2% in last fiscal: Crisil

Crisil predicts retail inflation in India will rise to 5.1% in the current fiscal from 2% last year, driven by high crude oil prices, a weak rupee, and the West Asia conflict.

"We expect retail inflation to print higher at 5.1 per cent in the current fiscal compared with 2 per cent last fiscal - Crisil"

New Delhi, May 15

Retail inflation in India is expected to rise to 5.1 per cent in the current fiscal year as higher wholesale prices, elevated crude oil costs and a weakening rupee increase pressure on consumer prices, according to a report by Crisil.

The report stated that the recent sharp rise in wholesale inflation, mainly due to the ongoing West Asia conflict, could gradually pass on to consumers in the form of higher retail prices.

It stated, "We expect retail inflation to print higher at 5.1 per cent in the current fiscal compared with 2 per cent last fiscal".

According to the report, Wholesale Price Index (WPI)-based inflation rose sharply to 8.3 per cent in April 2026 from 3.9 per cent in March, while Consumer Price Index (CPI)-based inflation increased only marginally to 3.48 per cent from 3.40 per cent during the same period.

The report noted that the impact of the West Asia conflict has already started affecting wholesale prices through higher energy and commodity costs, although the full impact is yet to reflect in retail inflation.

"WPI inflation decisively surpassed a benign CPI, hit by the West Asia conflict. The upside risk to inflation from the conflict is yet to materially reflect in CPI," the report said.

Crisil stated that the divergence between wholesale and retail inflation is expected to continue in the current fiscal year, unlike last year.

The report explained that WPI inflation is more directly impacted by global commodity shocks because it reflects prices in wholesale markets and production costs, while CPI measures prices paid by consumers for goods and services.

The report highlighted that WPI inflation has historically been more volatile than CPI inflation.

According to the report, inflation in several commodity-linked segments rose sharply in April 2026.

Crude petroleum inflation surged to 88.1 per cent in April from 51.6 per cent in March, while furnace oil inflation jumped to 74.2 per cent from 9.7 per cent. Natural gas inflation also increased to 24.9 per cent.

Inflation in liquefied petroleum gas (LPG) rose to 10.9 per cent, while basic chemicals inflation increased to 7.8 per cent during April.

The report stated that rising wholesale inflation increases input costs for industries, which may eventually force companies to pass on higher costs to consumers.

According to Crisil, retail inflation is expected to rise to 5.1 per cent in the current fiscal compared with 2 per cent in the previous fiscal.

The report identified several reasons for the expected increase in inflation.

These include persistently high global crude oil prices, rising prices of petrol, diesel and compressed natural gas, and the depreciation of the rupee, which increases the cost of imported goods and raw materials.

The report also warned that food inflation may rise because of disrupted agricultural production due to heatwaves and an expected below-normal monsoon linked to El Nino conditions.

Crisil further stated that statistical low-base effects could also contribute to higher inflation readings in the current fiscal year.

- ANI

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Reader Comments

P
Priya S
Interesting analysis from Crisil. I just hope the RBI doesn't overreact and hike interest rates again — home loan EMIs are already painful. Also, heatwaves and weak monsoon sound scary for food prices. Let's hope for good rains this year! 🙏
R
Rohit P
All this inflation talk is just making me anxious. Last year 2% felt manageable, now 5.1%? That's more than double. And the fuel prices are already sky-high. Can't the government negotiate better deals with oil-producing nations or boost domestic production?
J
James A
As someone who lives in the US now, seeing Indian inflation at 5.1% is concerning but not unusual globally. The key is whether wages and employment can keep up. However, the food inflation due to monsoon risk is unique to India and needs proper policy response.
S
Siddharth J
The divergence between WPI (8.3%) and CPI (3.48%) is worrying because companies will eventually pass on cost increases. I feel for small business owners — input costs rising while customers can't afford higher prices. Government should look at targeted subsidies for essential items.
M
Meera T
My mother still tells me stories of 10-12% inflation in the 1990s. So 5.1% is not the end of the world, but it stings when salaries don't rise proportionally. The heatwave and El Nino points are scary — our farmers already struggle so much. 🌾

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