Malhotra said headline inflation is projected to increase, primarily due to supply-side pressures from food and fuel, while core inflation remains moderate and is expected to decline after peaking in the third quarter. Core inflation for the financial year has been projected at 4.3 per cent. The Governor said, "Core inflation, excluding precious metals is projected to be lower than core, although it is likely to align with core inflation towards the end of the financial year." He said the rise in inflation in June was primarily driven by higher food and fuel prices, including fuel-induced inflation. Despite higher input costs, core inflation, excluding food and fuel, remained unchanged at 3.9 per cent in May and June.