Consumer inflation likely 3% below RBI estimate in Q4: UBI Report

New Delhi: Consumer inflation for the fourth quarter of the current fiscal is expected to be around 3 per cent, slightly below the Reserve Bank of India’s (RBI) projection of 3.2 per cent, according to a report by Union Bank of India.

Also Read: India’s February retail inflation rises to 3.21% before impact of Iran war hits

The report stated that the bank’s internal forecasts indicate that inflation will remain lower than the central bank’s forecasts in the coming quarters.

“Our CPI forecast for the 26th quarter currently stands at 3 per cent, slightly below the RBI’s forecast of 3.2 per cent,” the report said.

However, the report added: The Monetary Policy Committee (MPC) is expected to revise the inflation outlook at its policy meeting next April.

The update in forecasts took place after the Ministry of Statistics and Program Implementation (MoSPI) decided to change the base year used in inflation calculation. The Ministry has officially shifted the base year of the Consumer Price Index (CPI) from 2012 to 2024.
Meanwhile, the latest inflation data shows that CPI inflation in February 2026 increased compared to the previous month. According to the report, in February 2026, Consumer Price Index (CPI) inflation accelerated its upward trend, reaching 3.21 percent from 2.74 percent in January.

Although headline inflation reached its highest level in 11 months, it remained well within the central bank’s comfort range.

There was also a visible increase in food inflation during the month. The report stated that food inflation was 3.35 percent in February, above the bank’s estimate of 2.55 percent.

Food inflation also increased rapidly, with an increase of 123 basis points during the month. The report stated that this increase was a surprise because vegetable prices dropped significantly during this period.

“This was an element of surprise as vegetables experienced a decline of more than 14% during the month compared to the previous month,” the report said.

Also Read: Food prices pushed India’s inflation to 3.21% in February

Looking ahead, the report expects food inflation to remain largely muted in FY26, supported by the high base effect. However, he warned that inflation could see some upward pressure in March.

“We expect food inflation to remain largely muted in FY26, supported by a high base, although March may see pressure on the higher side as summer heat kicks in amid supply-side concerns in an era of war and uncertainties,” the report said. The statement was included.