Economic Outlook & Macro Trends
The YoY WPI inflation accelerated to an 11-month high of 2.1% in February 2026 from 1.8% in January 2026, while printing in line with ICRA’s forecast. The uptick was mainly driven by primary food and non-food items as well as crude petroleum, and natural gas sub-groups, which together pushed up the headline WPI print by as much as 30 bps, compared to January 2026. Given the hardening in prices of several global commodity prices including crude oil, natural gas and edible oils amid the West Asia conflict, as well as majority of domestic food items, ICRA projects the WPI inflation to rise further to 3.2% in March 2026, the highest level in 21 months. The ongoing weakness in the USD/INR pair and consequent pressure on landed imported costs, combined with continuation of the conflict for a prolonged period pose significant upside risks to the near-term outlook for the WPI inflation.
EXHIBIT: In line with ICRA’s forecast, headline WPI inflation rose modestly to
an 11-month high of 2.1% in February 2026 from 1.8% in January 2026; core
inflation also inched up to 3.3% from 3.2% between these months
Source: Office of the Economic Advisor, Ministry of Commerce and Industry, GoI; ICRA Research
