The outlook on prices has yo-yoed in recent months — first rising, then falling and then rising again. Crude oil prices were easing before the conflict in West Asia pushed these up again. Gold prices have hovered in the $4,000-$4,200 band per ounce, though, at that level, they reflect a multi-year uptrend. Short-term inflation forecasts moved from pessimistic to borderline sanguine before coming under the super El Nino and possible food inflation shadow. Against this backdrop, how should we look at full-year inflation?

Crude oil prices remaining high for over 100 days present the main challenge for a benign inflation print, having already entered cost calculations of companies, as reflected in the wholesale price index. This has led to an increase in prices reflected in core inflation.

A gradual easing can be expected if the pre-war equilibrium is restored. The question, however, is whether or not producers will lower their final prices. Higher oil and gas prices have worked their way into prices of pesticides, fertilisers, paints, automobiles, glass, ceramics and other products. Restaurants have hiked prices across their menus and it is unlikely that these........

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