Crisil: Gold Is Pushing Up India’s Core Inflation
Why in the news
Crisil linked gold’s surge, driven by global uncertainty, to higher core inflation even as headline inflation cooled.
Key facts
- May 2025: headline CPI 2.8% (75-month low); core 4.2%, up 111 basis points year on year.
- Gold has a 2.3% weight in the core basket but explained 17% of the rise.
- Gold inflation averaged 24.7% in FY25 against 15.1% in FY24.
Volatility (standard deviation)
| Item | Value |
|---|---|
| Gold | 12 |
| Fuel | 4.5 |
| Food | 3.6 |
Other drivers and recommendation
- Also up: mobile tariffs, travel and transport, toiletries, silver.
- Exclude gold from core, as food and fuel are, because global investor demand distorts domestic signals.
- US, UK, Japan and EU include gold at under 1% weight.
Exam angle
- Agency: Crisil; core inflation: 4.2%.