India’s August Inflation Rises to 4.82%, Exceeding Forecasts and Bolstering Rate Hike Expectations

• India’s August CPI rose to 4.82%, above forecasts.
• Driven by 5.95% food inflation and fuel costs.
• Bolsters RBI rate hike expectations.

India’s consumer price inflation accelerated to 4.82% in August, up from 4.45% in July, marginally exceeding economists’ forecasts of 4.80%. This marks the highest inflation rate since December 2024 and extends a trend of rising prices for ten consecutive months. The primary drivers included a significant increase in food inflation, which reached 5.95%, alongside higher fuel and transportation costs. While the headline figure remains within the Reserve Bank of India’s 2%-6% tolerance band, it stands above its 4% medium-term target. The persistent inflationary pressures, particularly from food, are reinforcing market expectations for potential interest rate adjustments by the central bank.