MUMBAI — SBI Research today released its latest Ecowrap report (Issue No. 18, FY27), revealing that India’s retail CPI inflation for July 2026 rose marginally to 4.45% YoY, aligning with broader market expectations. The slight uptick from 4.38% in June was primarily driven by accelerating food inflation, which reached 5.52% due to elevated prices of essential kitchen staples such as onions, ginger, and garlic. Meanwhile, imported inflation recorded a notable decline from 8.1% in June to 7.3% in July. Core CPI (excluding food and fuel) eased slightly by 5 bps to 3.85%, while Core CPI excluding gold stood at 3.44%.
The report highlights a temporary softening in corporate aggregate EBITDA margins, which fell from 16.8% in Q1 FY26 to 14.8% in Q1 FY27, particularly across the cement, fertilizers, and mining sectors—indicating that businesses are absorbing rising input costs rather than passing them on immediately. Looking ahead, SBI Research projects August inflation at 4.7%, expecting a brief breach above the 6.0% mark in October and November before moderating to around 5.0% in Q4 FY27. Based on these domestic dynamics and historical trends, the report forecasts the RBI to maintain a status-quo on the repo rate at 5.25% throughout FY27. On the macroeconomic front, nominal GDP for FY27 is projected at 13–13.5% against the budgeted 10%, which is expected to provide a fiscal deficit cushion of approximately ₹70,000 crore.
On global and capital flow fronts, total mobilized capital inflows via FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCBs), and External Commercial Borrowings (ECBs) are projected to reach $50–$52 billion. Amount mobilized under FCNR(B) alone is expected to touch around $45 billion by mid-August. Globally, softer US employment data and a cooling US inflation print of 3.4% have renewed interest in precious metals amid expectations of the Fed maintaining a pause on rate hikes. Concurrently, persistent supply constraints and new-age industrial demand continue to drive base metal prices upward despite a subdued global economic outlook.
