If one takes a longer series of over three years, there is some evidence that core inflation does have statistically significant predictive power. 1F  28. Theoretically, the rationale underlying core inflation is valid if variations in the prices of food and energy products are temporary and do not, on average, differ from other prices.
If that is not the case, core inflation is neither a good estimate of the underlying inflation nor a reliable predictor of future inflation. 29. Even as the use and interpretation of core inflation in advanced economies remains contentious, in an economy like India, we have to contend with additional questions.