Energy Shock Impact on India Inflation to Pick Up in Next Months, Nomura Says
Nomura expects the impact of the energy shock due to the Middle East conflict to gain ground in India following a limited effect in March, according to a Tuesday research note.India's CPI inflation ticked up to only 3.4% year over year in March from 3.2% in February, aided by government subsidies for consumers, weak food inflation, and stable core inflation, the equity research firm said.Further price pressures should pass through in the next few months amid a general increase in input cost pressure and heightened margin pressure for firms, according to Nomura.Food price inflation may face strains from below-normal rains and El Niño, the research firm said.Inflation is moving toward slightly under 4% in April, while core inflation could rise to 3.8% from 3.5% last month, Nomura said.The research firm forecasts headline inflation at an average of 5% in fiscal 2027 and core inflation at 4.5% in average.