India's inflation rises to 2.07% in August
India's retail inflation moved up to 2.07% in August 2025 after hitting an eight-year low of 1.55% in July.
The main reason? Food prices got more expensive.
Even with this bump, inflation has stayed well below the Reserve Bank of India's (RBI) target of 4% for seven straight months.
RBI's inflation outlook for FY26 and FY27
Economists saw this coming, predicting around 2.1%.
Looking ahead, the RBI expects inflation to be about 3.1% for the full year FY26 and possibly rise to nearly 5% by early FY27, with a projection of 4.9% for Q1 FY27.
Core inflation remains steady at around 4%
The RBI's forecasts show gradual increases: 2.1% in Q2, then up to 4.4% by Q4 of FY26.
Core inflation (which skips food and fuel) is holding steady at around 4%.
For now, the RBI says risks are pretty balanced—so no big surprises expected either way unless something major changes.