RBI raises FY27 inflation to 5.1% as higher fuel prices hit input costs

The RBI on Friday projected the retail inflation for 2026-27 at 5.1 per cent, higher from its earlier estimate of 4.6 per cent, largely due to mounting input costs, triggered by the pass-through of higher global energy prices to retail rates of petrol and diesel.

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Since May, retail fuel prices have been raised cumulatively by 7.4 per cent for petrol and 8.4 per cent for diesel.

‘The increase implies a direct impact of about 36 basis points on headline inflation, which, along with second order effects, would get reflected in consumer price (CPI) inflation in the coming months, the RBI said in its monetary policy statement.