New Delhi, Aug 6 — India’s consumer price index is expected to settle at 4.5 per cent in July 2026, with risks tilted to the upside as food inflation broadens across key items, a report said on Thursday.
The report from Bank of Baroda said inflation remains broad‑based across essential commodities, led by onions, edible oils, rice and pulses, although improved arrivals of key vegetables and a normal monsoon offer some comfort.
Core inflation (excluding food and fuel) is expected to remain contained at around 4–4.1 per cent, supported by softer international gold prices, though higher input costs could create upside pressure going forward.
The bank mentioned that its Essential Commodities Index (BoB ECI) has risen at its sharpest pace in the entire series in July 2026 by 4.1 per cent, on YoY basis. In August 2026, the build-up was even higher (first 5-days) at 5.4 per cent.
The bank noted that among vegetables the arrival statistics for TOP (tomato, onion and potato) have been comforting despite stickiness in onion price trajectory.
International gold prices have softened further by -3.7 per cent on MoM basis, hence personal care and effects of core inflation are likely to derive some relief. Core excluding precious metals is also likely to be muted for now, the report noted.
Monsoon progress was mentioned as favourable, with 63 per cent of States receiving normal rainfall.
The area sown as percentage of normal area of major Kharif crops (except oilseeds and sugarcane) as on July 31, 2026 have remained above the same period of previous year.
International food prices, especially edible oils, have softened, the report said.
The bank warned that upside risks could emerge in the near term as corporate Q1 transcripts indicate pass‑through of higher input costs to consumers amid robust demand conditions.